Not everyone in New Zealand welcomes Hobbit's return (Feature)

By David Barber Oct 28, 2010, 7:38 GMT

Wellington - Warner Bros Entertainment Inc may be laughing all the way to the bank after getting New Zealand to concede subsidies and a change in labour laws, but not everyone is happy about the price the country is paying to secure the filming of The Hobbit movies.

'Hobbit folk grovel to feudal movie lords,' read one headline Thursday, voicing a widespread criticism of the government's agreement to stump up nearly 100 million New Zealand dollars (75 million US dollars) in tax breaks and joint financing.

Many struggle to understand how the government can support the project to make two movies based on author JRR Tolkien's fantasy novel, when clamping down on public spending at the same time.

New Zealand, which on Wednesday secured the agreement to be the production site - and set - for the films, is emerging from a 15-month recession and facing a deficit of 13 billion New Zealand dollars in the current fiscal year.

The movies, budgeted at 250 million US dollars each, will be made by local Peter Jackson, director of the Oscar-winning Lord of the Rings trilogy, also filmed against New Zealand's spectacular scenery.

Hundreds of thousands of New Zealanders embraced the movies, calling their country Middle Earth, after the fictional land where Tolkien set them, and themselves Hobbits, diminutive human-like creatures which feature in them.

They also welcomed with open arms the boost to tourism, the country's biggest single foreign earner, worth 9.5 billion New Zealand dollars last year.

It is hard to say how many are drawn specifically by Jackson's screen adaptations, but the Tourism Industry Association says visitors are still flocking to locations which feature in the trilogy, seven years after their release.

Prime Minister John Key led this week's negotiations with a team of 10 Warner Bros executives, who threatened to move filming to another country because of labour activism.

Key's government, which this month told striking high school teachers it could not afford to raise wages, agreed to give Warner Bros extra tax breaks worth 15 million US dollars, on top of the standard 15-per-cent tax rebate given to all big screen productions.

The government also said it would contribute 10 million US dollars towards marketing, in the hope that increased tourism would repay the investment.

On top of this, Key agreed to rush a change to labour laws through all stages of the parliamentary process, avoiding the customary scrutiny by committees and public hearings.

Key was in a tight spot, some observers concede.

'What kind of a country sells its democratic soul for 30 pieces of silver?' commentator John Armstrong asked in the New Zealand Herald. 'The answer is a small one. And one where the economy shows little sign of recovery in the short term.'

Key's political opponents have been less lenient. 'The government has been done over by Warner Bros,' said opposition Labour Party legislator Trevor Mallard. 'It makes us look like a very Mickey Mouse state.'

Helen Kelly, president of the Council of Trade Unions, accused the conservative government of taking advantage of the situation to make an opportunistic attack on workers' rights.

The labour issue arose when the studio raised concerns about the implications of a Supreme Court ruling that an independent contractor made redundant after working on The Lord of the Rings movies was actually an 'employee' and therefore able to claim compensation for unjustified dismissal.

Key said the changes would clarify the distinction between independent contractors and employees related to the film production industry. The clarification would guarantee the movies are made in New Zealand and provide 'thousands and thousands' of jobs, he said.

Even if many of those jobs would only last as long as the filming, the changes would attract other productions.

'I'd be surprised if these are the last two movies made here by Warner Bros,' Key said. 'We only have the guarantee for these two but we've delivered an environment that's conducive to them doing business.'

Paul Roth, an employment law specialist at Otago University, said the change showed that New Zealand was prepared 'to basically lie back and prostitute ourselves to get more employment into this country.'

Columnist Brian Rudman wrote in the New Zealand Herald, 'The Hobbit is about a bunch of peasants living simple feudal lives. The way we're behaving, where else but New Zealand could it be filmed?'