Details Of Improvements To Screen Production Rebate Revealed

Details of changes to the government’s investment in the screen sector were released today, designed to attract and support quality productions that generate great economic and cultural benefits for New Zealand.

Hīkina Whakatutuki Ministry of Business, Innovation and Employment (MBIE) and Manatū Taonga Ministry for Culture and Heritage, released further details about changes to the New Zealand Screen Production Rebate which were announced in May. The changes will take effect over coming months.

Changes for international productions

"The new process for the 5 percent Uplift incentive is simpler to navigate, and the eligibility criteria clearer and more objective," says Gina Williamson, MBIE’s Industry Policy Manager.

"We want to encourage international productions to actively contribute to the ongoing success of our New Zealand screen sector which is why we have enhanced the workforce development components in the Uplift.

"We have also introduced sustainability criteria into the Uplift, to support Aotearoa New Zealand’s shift to a low-emissions economy and we have widened the incentives for repeat activity to encourage productions to return."

Applications for the redeveloped Uplift can be made from 1 November 2023. The necessary documentation and guidance will be available from the New Zealand Film Commission as soon as practicable before then.

Alongside improvements to the Uplift rebate, the Post-Production, Digital and Visual Effects (PDV) rebate will return to a flat rate of 20 percent, making it more competitive, and the qualifying expenditure threshold will be reduced to NZ$250,000, enabling smaller productions to benefit from it.

The PDV changes will come into effect soon so productions that begin an ongoing schedule of PDV activity from 31 August 2023 will be able to benefit from the new settings.

Changes for domestic productions

"Following on from the change announced in May to the domestic rebate, we can now confirm that access to other government production funding alongside the rebate will not be subject to any additional criteria, beyond those that already apply to the relevant funding," says Emily Fabling, Pou Mataaho o Te Aka Deputy Chief Executive Policy and Sector Performance at Manatū Taonga.

"This change is about supporting and encouraging more high-quality, locally focused screen productions with strong cultural value for both the sector and New Zealand.

"To ensure these benefits start flowing as soon as possible, it will come into effect on 31 August 2023 for productions that have not begun principal photography at that date.

"We’ve also taken the opportunity to address some of the technical issues raised during the Review and from public consultation, which can be implemented at the same time. Three additional changes will be made to the domestic rebate criteria, to help future proof the scheme.

"Following on from its success through COVID and recognising the win-win benefits of allowing production loans to be paid down earlier, the provision for interim rebate payments will be made permanent.

"The 'market attachment' requirement, which ensures government support goes to productions that will reach audiences and perform well, will be tweaked to recognise sales, distribution and license fees from related entities - provided they are operating independently.

"We are also introducing a cap on ‘above-the-line’ costs that can qualify for the domestic rebate, at 25 percent of a production’s budget, to provide a clear and consistent way of ensuring costs claimed are reasonable."

The New Zealand Screen Production Rebate is administered by the New Zealand Film Commission, with Manatū Taonga responsible for the domestic component and MBIE the international component.

More detail about the changes is available here: https://mch.govt.nz/screen-changes

Notes for editor:

- The screen sector contributes more than $3.5 billion to the economy each year, directly employing 13,900 people, with flow on benefits for other industries, such as hospitality, construction and tourism.

- The 5% Uplift provides an additional incentive to the 20 percent rebate to attract medium to large international productions which provide significant benefits to our domestic screen industry and wider economy. Key changes to the Uplift include: A streamlined process: Applications will be considered by the New Zealand Screen Production Rebate panel, using clear and transparent criteria. Previously productions had to be invited to apply and have a proposal assessed by a separate Significant Economic Benefits Verification panel. These steps have been removed. More flexibility: Productions will have more flexibility in the ways they can meet the required threshold for the Uplift, reflecting the unique nature of different projects. More objective criteria: the updated criteria for the Uplift test make clear the nature and level of activities required to receive the Uplift. Improved focus on workforce development: Specific skills and training criteria are included in the new Uplift test, which will help to promote jobs and provide more career development opportunities for New Zealanders in the sector. New sustainability criteria: this includes a mandatory requirement for a sustainability plan, supporting New Zealand’s shift to a low-emissions economy. Repeat activity: Widened incentives for repeat activity will encourage productions to come to New Zealand again in future. In addition to points for past activity there are now points for sequels or episodic content, and for leasing studios into the future, demonstrating commitment to future repeat activity in New Zealand.

- Interim rebate payments can help producers to pay down loans earlier, minimising ongoing interest costs, and freeing up cashflow for the remainder of the production. As interest costs qualify for the rebate, interim payments are also likely to provide modest savings to the government.

- ‘Above-the-line’ costs will be defined as they are in the international rebate, covering development expenditure and the remuneration and travel costs of writers, directors, producers, and lead cast.

- The limit will be set at 25 percent of a production’s budget. To minimise any unintended consequences, the limit may be exceeded in exceptional circumstances. The NZFC will develop a policy to support this discretion to be exercised fairly and consistently.

- To be eligible for the domestic rebate, productions need to have secured ‘market attachments’ (e.g. sales or distribution advances and licence fees) from parties unrelated to the production.

- The change will recognise legitimate market attachments from related parties, provided the parties are operating truly independently from one another. It will also help to future-proof the rebate in case of any further business mergers in the New Zealand screen sector.

- Domestic changes will come into effect on 31 August 2023. Interim payments and the market attachment change will only apply to productions that have not begun principal photography at that date. The cap on above-the-line costs will apply to productions that have not at that date had an acknowledgement of their provisional certificate application.

- A check-in after one year will provide an opportunity to make any necessary tweaks to ensure the changes to the rebate (both domestic and international components) are working as intended.

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