Hobbit decision welcomed, but PM cops flak

There is widespread relief that production of The Hobbit movies will stay in New Zealand, but Prime Minister John Key is copping criticism for the concessions given to Warner Bros.

Mr Key announced the agreement with Warner Bros last night after two days of negotiations with studio executives who had been worried about industrial disputes and wanted a bigger tax break than the standard 15 percent for big movies to keep filming production here.

They got what they wanted with legislation due to be rushed through Parliament today that will clear up confusion about the legal status of contractors and employees, and also a $20 million tax break, which was far short of what they argued for.

Mr Key said employment law changes were vital to ensure the $630m films stayed here as existing law could have led to disputes and court cases that would have held up production and cost millions. The change will cover only the movie industry.

Council of Trade Unions (CTU) president Helen Kelly said no-one would resent The Hobbit films being made here, but the cost was "outrageous".

"That a foreign corporation can come into this country and demand that workers' rights in this industry be removed -- and that's effectively what's going to happen today under urgency," she told TVNZ's Breakfast programme.

She said unions had given an assurance to Warner Bros that there wouldn't be disruptions to filming, but that had been undermined by Mr Key.

"He actually knows it's genuine and knows that we are capable of keeping that assurance, but regardless, the change in law is unrelated and a Government which has a systematic record of removing worker rights has added this to their pile of things they want to change."

Professor Nigel Haworth from the University of Auckland Business School said moving to change employment legislation was unusual.

"We've got a very sensible basis of labour law already in place. We have a very good regime for inviting foreign capital in, we are very open to that already. It's very unusual for a developed nation to go this far in order to make an investment attractive."

Prof Haworth said he wondered precisely what changes could or would be made to existing law, and whether it could set a precedent for other industries.

The unease during the past few weeks has been unsettling for director Sir Peter Jackson, and there was no immediate comment from his camp over the latest development, but Tourism New Zealand said it was "thrilled".

"People are still travelling to New Zealand today because of the exposure gained through the Lord of the Rings trilogy and The Hobbit will provide another much-needed boost to our tourism industry," said public affairs manager Suzanne Carter.

Labour and the Greens said while they wanted the films shot here, there were concerns over the extent which the Government went to secure them.

"We think it is totally unacceptable that Parliament will be meeting under urgency basically to do the bidding of Warner Brothers," Greens co-leader Russel Norman told NZPA.

He said if the bill weakened the laws around independent contractors and had been written by Warner Bros lawyers, the Greens would vote against it.

Labour MP Trevor Mallard said the party would look at the bill and was likely to oppose it unless the Government had found an acceptable formula. He said in Parliament last night that it appeared Mr Key had been "screwed" by Warner Bros.

National has assured support from ACT and United Future.