Budget 2025: Half-billion-dollar boost for film industry
Economic Growth Minister Nicola Willis made the pre-Budget announcement on Friday, which will inject $577 million into film and television production over the next four years.
While industry incentives aren't the favoured approach, Willis said they were necessary to compete with the likes of Australia, Canada, and the United Kingdom.
Eligible productions can access a 20% rebate where production costs are more than $15 million for feature films, and $4 million for television productions.
"A further five percent rebate is available to productions spending more than $30 million, which meet additional criteria for industry and economic growth," Willis said.
The New Zealand screen sector keeps about 24,000 people in work and has generated about $3.5 billion in annual revenue, she said.
"Following a review of the rebate settings completed in late-2023, 10 big international productions have been attracted here, including eight from the major Hollywood studios," Willis said.
They include A Minecraft Movie, the second highest-grossing film of 2025 so far, and Taika Waititi's Klara and the Sun which was in production.
The Budget 2025 increase will increase baseline funding for the screen production rebate to better reflect "current forecast demand".
The new money will increase funding for 2024/25 to $250 million, and to $210 million from 2025/26 onwards.
Willis said inbound productions invested nearly $7.5 billion in New Zealand in the past decade, which were supported by $1.5 billion in rebate payments.
"The reality is we simply won't get the offshore investment in our highly successful screen sector without continuing this scheme," she said.
rnz.co.nz
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
NZ Herald
a day ago
- NZ Herald
KiwiSaver hardship reveals hidden cost of this economic downturn
We had news last week that KiwiSaver members withdrew more than $470 million for hardship reasons in the past 12 months amid continuing economic stress. Inland Revenue figures showed $470.7m was taken out of KiwiSaver in the June financial year, up 56.6% from $300.5m over the prior period. Looking back through the figures, there has certainly been a big spike in withdrawals in the past two years, but they have been on the rise for several years. Since Covid, both the number of people withdrawing funds and the amount withdrawn have risen steadily. As a barometer of the general economic situation, that isn't great. But the bigger problem with these hardship withdrawals is that the ultimate cost is (quite literally) compounded through the years. More than $1.3 billion of KiwiSaver funds has been withdrawn for hardship reasons in the past five years. If we do some back-of-the-envelope calculations and assume this money could have earned around 7% returns for the next 20 years, then we get a figure of more than $5b that will be missing from the nation's pool of retirement funds by 2045. Given the current trend of withdrawals, I suspect this is a conservative estimate. I understand why we allow withdrawals for hardship. It doesn't make sense for people to lose their homes or to go hungry when they have thousands of dollars sitting in a KiwiSaver account, so I'm not advocating that we stop allowing the withdrawals. However, there is a hidden cost and the situation highlights just how crucial it is for the Government to put more focus on retirement savings. There is a lot more money coming out of the KiwiSaver scheme to fund people into their first homes. Since Covid hit, an average of about $1.2b a year has been withdrawn from KiwiSaver for first home purchases. A home is an asset at least, and home ownership is an important step on the path to financial independence. I suspect we just have to accept the first home buyer withdrawals as a feature of the KiwiSaver scheme. If young people are in the scheme from the start of their working life and have $10,000 or $20,000 to put towards a house deposit, they are probably ahead of where many in my generation were at the same age. But the reality is that as a nation, we're well behind on where we need to be with our retirement savings. According to Stats NZ projections, the percentage of the population aged 65+ will increase from roughly 16-17% in the early 2020s to about 19-20% by 2030. By 2050, around 24-26% of New Zealanders are expected to be 65+. The old-age dependency ratio (ratio of elderly to working-age population) is expected to nearly double between 2020 and 2050. Our annual superannuation bill already comes in at more than $20b, and Treasury has projected that to rise to about $45b by 2037. According to Budget 2025 data, New Zealand Superannuation costs $4352 per person per year, making it the third-largest area of government spending after welfare ($6181 per person) and health ($5804 per person). From the Treasury's long-term fiscal projections, spending on NZ Super is projected to grow from 4.3% of GDP in 2010 to 7.9% in 2060, an increase of 3.6 percentage points. It is also rising as a percentage of the Government's total tax revenue – from about 17% now, it is projected to rise above 21% by 2037. So we know we have a problem. It seems almost certain that the age of superannuation will have to be raised to 67 in the coming years – despite the current opposition of NZ First and Labour. Future governments will almost certainly come under more pressure to means-test. KiwiSaver, which currently has total funds of $122b, is one of our great hopes. But the total figure is flattering. There are more than three million KiwiSaver members so the average fund size is just $37,000. Hopefully, that will be skewed by a lot of young people who will see their savings grow dramatically in the next decades. That brings us back to the downside of withdrawing funds early for hardship, though. We need to be saving more, not less. Moves by the Government to lift the default contribution rate for both employees and employers to 4% from April 2028 were a step in the right direction. However, they pale in comparison to Australia's compulsory scheme, which requires 12% employer contributions. The scheme has the equivalent of $4.5 trillion invested, making Australia the fifth-largest holder of pension fund assets in the world, not per capita but in nominal terms. Australia, for the record, also allows people to withdraw funds for hardship, but one suspects fewer people there need to. If we want to make the most of the KiwiSaver scheme we have, we need to look more closely at who is withdrawing their money and why. Meanwhile, young Kiwis are voting with their feet and joining the Australian Superannuation scheme ... by virtue of moving to work there. Liam Dann is business editor-at-large for the New Zealand Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.
1News
2 days ago
- 1News
Is there anything we can actually do to bring down butter prices?
The alarming rise of butter prices has become a real source of frustration for New Zealand consumers, as well as a topic of political recrimination, writes Lincoln University professor of agricultural economics Alan Renwick. The issue has become so serious that Miles Hurrell, chief executive of dairy co-operative Fonterra, was summoned to meetings with the government and opposition parties this week. After meeting Hurrell, Finance Minister Nicola Willis appeared to place some of the blame for the high price of butter on supermarkets rather than on the dairy giant. According to Stats NZ, butter prices rose by 46.5% in the year to June and are now 120% higher than a decade ago. The average price for a 500g block is NZ$8.60, with some local brands costing over $10. But solving the problem is not a matter of waving a magic economic wand. Several factors influence butter prices, few of which can be altered directly by government policy. ADVERTISEMENT And the question remains – would we want to? Proposals such as reducing exports to boost domestic supply, or cutting goods and services tax (GST) on dairy products, all carry consequences. A key factor driving butter prices in New Zealand is that 95% of the country's dairy production is exported. Limited domestic supply and strong global demand have pushed up prices for a range of commodities – not just milk, but beef as well. These increases are reflected in local retail prices. Another contributing factor is rising costs along the supply chain. At the farm level, producers are receiving record prices for dairy. But this comes at a time when input costs have also increased significantly. It is not all profit. Weighing the options Finance Minister Nicola Willis. (Source: Getty) Before changing rules around dairy exports, the government must weigh the broader consequences. ADVERTISEMENT On the one hand, high milk prices benefit 'NZ Inc'. The dairy sector accounts for 25% of exports and employs 55,000 New Zealanders. When farmers do well, the wider rural economy benefits – with flow-on effects for the country as a whole. On the other hand, there is the ongoing challenge of domestic food security. Many people cannot afford basic groceries and foodbank use is rising. So how can New Zealand maintain a food system that benefits from exports while also supporting struggling domestic consumers? One option is to remove GST from food. Other countries exempt dairy products from such taxes in an effort to make staples more affordable. This idea has been repeatedly reviewed and rejected – including by the 2018 Tax Working Group. In 2024, it was estimated that removing GST could cost the government between $3.3bn and $3.9bn, with only modest benefits for the average household. Fonterra or supermarkets? File photo. (Source: ADVERTISEMENT Another route would be to examine Fonterra's dominance in the supply chain. There are advantages to having a strong global player. And it is not in the national interest for the company to incur losses on domestic sales. Still, the structure of the market may warrant scrutiny. For a long time there were just two main suppliers of processed dairy products – Fonterra and Goodman Fielder – and two main retailers – Foodstuffs and Woolworths. This set up reduced the need to compete on prices. While there is arguably more competition in manufacturing sector now, supermarkets are still under scrutiny and have long faced criticism for a lack of competition. The opaque nature of the profit margins across the supply chain also fuels suspicion. Consumers know what they pay at the checkout and what farmers receive. But the rest is less clear. This lack of transparency invites speculation about who benefits from soaring prices. In the end, though, the government may not need to act at all. As economists like to say: 'Nothing cures high prices like high prices.' While demand for butter is relatively inelastic, there comes a point at which consumers reduce their purchases or seek alternatives. International buyers will also push back – and falling global demand may redirect more supply to domestic markets. High prices also act as a signal to producers across the globe to increase production, which could happen relatively quickly if there are favourable climatic and other conditions. ADVERTISEMENT We only need to look back to 2014, when the price of dairy dropped by 48% over the course of 12 months due to reduced demand and increased supply, to see how quickly the situation can change. Alan Renwick is a professor of agricultural economics at New Zealand's Lincoln University. This article was republished from The Conversation under a Creative Commons Licence.
NZ Herald
2 days ago
- NZ Herald
Government should cut GST on food if it's worried about butter price – Fran O'Sullivan
The Finance Minister did not need to call Hurrell in to reaffirm that global dairy prices are at a high and that this would inevitably spill over to higher farmer returns and, in turn, boost regional and finally national economies. (That's the plus side you didn't hear about before the meeting). Or that any notion of Fonterra slashing its own margins was not going to happen. They are thin when compared with the margins applied by supermarkets to dairy products, and she knows it. The upshot is that Willis did seek explanations from Hurrell over the co-operative's pricing, which she of course accepted. Within days, she was talking up Fonterra and the surging global prices on the Mike Hosking show as a plus – as indeed they are when it comes to the impact on the New Zealand economy. Hurrell subsequently made it clear his company is not moving to a two-tiered pricing system: an export price geared to global prices and a subsidised price for domestic consumers. There was more besides. It was sensible for Fonterra to shut the issue down quickly. It currently has its consumer brands business on the market. Any suggestion of a move to a two-tiered system would be a complication to that sales process or indeed an IPO of that business if that ultimately turns out to be the Fonterra board's preferred option. But while there was an element of the performative to the Beehive shenanigans, it does underline how much 'cost of living' issues are a lightning rod when it comes to sparking domestic dissatisfaction with the Government. Willis later described her meeting with Hurrell as 'constructive and engaging', underlining the fact that Fonterra does not control retail prices and that the final price is set by supermarkets, whose contracts and pricing strategies vary. This was more grist to Willis' campaign against what she claims are supermarkets profiteering at the expense of consumers. Already, she has been working to reduce the barriers to entry for other competitors. Willis has been encouraged that the Commerce Commission has taken a case against grocery giant Foodstuffs North Island and Gilmours Wholesale to court over what it believes is cartel conduct. The regulator said civil proceedings would be filed against the big grocery suppliers under the Commerce Act and Grocery Industry Competition Act (GICA). Foodstuffs 'strongly denies' any unlawful conduct. The Commerce Commission has also levelled criminal charges against retailer Noel Leeming over what it claims is a misleading price-matching promotion. The company 'firmly' maintains it had not committed an offence and would vigorously defend itself against multiple charges of misleading customers under the Fair Trading Act. Put that to one side. Prices have escalated on multiple fronts: dairy products, meat and some fruits; electricity and gas, rates, insurances. But they have decreased on others: mortgage and loan interest rates, and some fuels. There is little point in trying to jawbone prices down. In many respects, the answer lies with Willis. If she is overly concerned, she could wipe the 15% GST from particular food items. This is the case in Australia, where its 10% GST does not apply to meat, fish, produce, cheese and eggs, plain milk and cream, bread, butter and other spreads, bottled water, tea and coffee, cooking ingredients and oils, or infant formula. In Britain, most foods are zero-rated. Many European countries have reduced value-added tax rates for food, typically running at 5%-7%. Basic foods are exempted in Singapore, there is an 8% rate in Japan, and in the United States some states exempt various food items from sales tax. The upshot is that New Zealand verges on being an outlier in this area. Any changes to the GST regime would, however, have an impact on how New Zealand's tax regime is perceived as being neutral. Farmers are not the enemy. There is much to celebrate from our rural sector, which will deliver nearly $60 billion in export earnings this year. The fixation on rising prices has also overly consumed the Prime Minister, who frequently talks about 'cost of living issues'. But this is not going to be solved in the medium term. The upshot is that, short of any intervention by the Government, consumers will just have to suck it up.
