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John Key can't afford to give Hollywood any more concessions

Prime Minister John Key’s visit to Hollywood today is not going to do him much good.

This is nothing to do with the many and varied conspiracy theories doing the rounds about the Kim Dotcom affair and any supposed connection with the prime minister's visit to Warner Brothers and other Hollywood entities.

The folks who believe all the tales surrounding our own Dotcom Bubble are people who already believe Mr Key is some sort of devil-spawn borne of Ayn Rand and a wolverine.

There is no political harm in rarking them up further – in other circumstances it might even have helped the government.

No, where the harm will be is in the indication Warners might want further government concessions to help make The Hobbit in New Zealand.

The studio has already successfully lobbied for a tweak to the labour laws and there are also tax concessions – admittedly, most around timing – for filmmakers.

But the admission the studio will want further concessions because of the high New Zealand dollar – and the government’s willingness to consider those concessions – is going to be damaging.

It seems the government will help large Hollywood studies who are hurt by the high kiwi, but New Zealand firms not so much.

It is difficult to see an upside in that.

Giving any business or sector special concessions of any kind from any government, especially tax concessions, is bad policy and bad in principle.

All it does is encourage lobbying, favouritism and the kind of poor economic performance – and a soft form of corruption – that bedevilled New Zealand for many years.

So for economic reasons as well as for the politics Mr Key would be better to tell Warners the same thing he and Finance Minister Bill English have told New Zealand firms over recent months.

Simply this: they will have to learn to deal with the kiwi dollar.

Politically, the government is already taking a hit after the events of the last month. Anecdotally, there are more grumbles about the butter-fingered way the prime minister has handled the Kim Dotcom affair.

I also understand National’s own polling shows it taking a considerable hit, not only in party vote but also in the prime minister’s popularity.

The pain being felt by exporters because of the high dollar is also having an impact, which is why the opposition parties are making such a big issue of it.

From a policy point of view, Labour, New Zealand First and the Greens are talking economic moonshine on the currency.

There is, in fact, little that can be done to lower the currency – at least, little that would not produce other, and worse, collateral damage to the economy.

But if Mr Key goes and gives concessions to one of the world’s largest companies because of the high kiwi dollar, while telling New Zealand exporters to, in effect, suck it up, all he is going to do is fuel his government’s critics and give the opposition more opportunity to spout economic nonsense.

That would be a double loss for the country.

More by Rob Hosking

Comments and questions

Why is Ian Fletcher a UK agent, working for the New Zealand security service?

Who needs a conspiracy theory when the corruption is hiding in plain sight? John Key and Hollywood are not "conspiring" to defraud NZ tax-payers, they just do it out in the open and then it's all good.

It's funny how the author talks about what is important to themselves as if this represents the majority view.

John Key is so busy doing business that he isn't watching the shop.

I agree he's not watching the shop, but as for "doing business"... is that what he is doing, or is he just "doing deals"?

john key is a dick

and your valued opinion on the leaders of other parties?

Concessions? Trying to drum up business for a major New Zealand industry, and going to desperate lengths to salvage a $600m movie deal for the country (and the entire industry's credibility as a destination for investment) after the Green's and Union's monumental, catastrophic and self-inflicted brain explosion?!?!? C'mon, you have to be kidding me!

Do some more reading please, you clearly missed some of the major players involved in actually creating the mess, ie the Aussies.

JK needs to seriously sharpen his management skills to help arrest further slippage in his popularity if he is to survive.
Shearer is looking more and more impressive with every viewing and National could well lose out in the next election.

Liberty, funny considering we just find the majority of our foreign owned banks are making ridiculous profits on the backs of New Zealanders whilst they still talk about selling our own one off as well as any SOE they can attempt to. The TPP treaty which surprisingly is getting very little airtime in our impartial media is their to further erode NZ's rights but that's ok ?

I'd say the PM would be asleep at the wheel but he clearly is a smart guy making sure agenda's are clearly met whilst the NZ public and media are asleep at the wheel instead. I for one will not be voting for a party that clearly has no mandate to help the public and if John Key was a mormon, I'd hazard to guess he was Mitt Romney's twin brother, at least in ethos.

Shearer? Are you serious? National may be losing some popularity, but as the best of a bad bunch I'd rather trust them (God help me) to run NZ than Labour or the Greens who have yet to come up with ANYTHING other than sniping. Sniping does not run a counrry, especially during a global monetary crisis.

Jk won't stand at next election he has achieved his personal goal and is looking for the next challenge. The minister for everything Steven Joyce will be lining up his seat.

Jk won't stand at next election he has achieved his personal goal and is looking for the next challenge. The minister for everything Steven Joyce will be lining up his seat.

You don't need to believe in conspiracies when you've been in the Information Technology sector for almost 15 years. The RIAA sent the same bogus charges against youTube earlier but nothing was ever done.

The same thing they suggest is so easily done on nearly all cloud storage services but it takes a dodgy PM to constantly lie or obfuscate the story. How about doing some research please journalists as the full story is still not out in the open and I wish our media wasn't so "owned" any more.

How does John Key explain why he'd like to sign us up to the TPP treaty considering it will help erode whatever democracy we perceive to have left in this country. Just because the American's let their spy agency, the CIA, operate on their own soil does not mean the GCSB are allowed to on our soil.

Dodgy PM? Dodgy opposition. What wonderful choices the voters have - NOT.

There is dodgy stuff everywhere, under all political parties. The movie about Dotcom, and all that is uncovered by a far reaching enquiry right back through the Labour, Clark and then Muldoon years will be a bigger box-office hit than the Hobbit. Maybe Keys could sign up Warners for that one while he's there!

Key's trip to Hollywood, is to ensure his name is included in The Hobbit.

Quid pro quo kinda thing; he granted generous tax credits to facilitate production in NZ. So it's only right, Warner Bros recognise him as Associate Producer, when the credits roll in the opening of the movie.
Key would be chuffed at that.

Hollywood want the TPPA with its strengthened copyright obligations that it has been unable to pass through legislative channels globally. It's needs to back door this through a Free Trade agreement because even former Senator Chris Dodd in charge of Hollywood Industry group MPAA can't get enough donations to campaign reelection funds to pass the unpopular copyright changes in the Senate. John "$$$" Key wants money for New Zealand economy. Ten points to the first person to guess what they are talking about ( hint: it's not Dotcom )

Good article Rob. You only need to look to Ireland to see the extremes of trying to make your country a "centre of excellence for certain industries" how many software firms are now based in Ireland compared to the years of little or no tax impost to those firms and how are the Irish Government coffers looking ?

Concessions are fine if you can afford them but we are better to look at the quality of output of the New Zealand film industry as the reason to base productions here rather than bending backwards to change laws and give concessions. Also isn't the real issue here not the high NZD but the low USD in any case ?

Teflon John goes to Hollywood. Comedy script featuring a slick, savvy, con-man who goes to New York, makes a killing on currency trading, and then has a meteoric rise to political power and fame in a small South Pacific country. Who would buy it?

Only one commenter pointed out the fact that the $NZ was not high but the US$ and Euro are low... and the only thing proping up the $US was it's status as the sovereign currency in which oil is traded... a monopoly it no longer holds as China's currency took on the same role on sept 6th, should have been sept 11 because this spells the end for the $US and the US economy.
And what is our Donkey doing? Closer ties to America which wants to gouge us with its TPP and have 'closer military ties'. The nation we should be boycotting who refused to honour the mutual extradition treaty when NZ requested the extradition of the head of the Rainbow Warrior terrorist attack in Auckland harbour... the french terrorist was working in Washington for a Belgian arms company supplying US special forces with untraceable weapons for their assassination program... yet NZ grovels and commits more serious crimes than Kim Dotcom in it's kowtowing to US corporate interests... and despite all the lies of the Dotcom Debacle we are expected to believe anything we are told by this yankee puppet?

Key's popularity is sinking faster than he cares to admit.

The film industry is worth more than the wine industry in New Zealand. I am sorry, but what is the problem with the PM going to meet arguably the most influential group of that industries largest customers?

New Zealand's film and television industries are funded significantly by the taxpayer. I'm not so sure NZ's wine industry is.

Interesting to see the anti-JK comment that just did not appear on NBR feedback 3 months ago. Yet the majority of the media are still letting him off far too lightly.

I couldn't help note the irony on Friday's 6am TV1 news: they mentioned the appointment for the Maritime Rena review without any noting of the GCSB irony or lack of maritime skills, then without pausing for a breath, announced JK's visit to Disney on the day's agenda... too surreal. Really says it all.

So explain to me why we got rid of farming subsidies in the 1980s (and rightly so), and have replaced them with subsidies for the movie industry? And worse still, for the US movie industry???

I fail to see why an industry needs my taxes to survive and why John Key continues to weaste money on this industry.

Lift your game, Mr Prime Minister. So far your performance has been mediocre at best.