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Hobbit films criticised for taxpayer subsidy

Groups in New Zealand have criticised the level of Government subsidy for The Hobbit film trilogy, reportedly reaching around NZ$200 million, as poor value-for-money for New Zealand.

Figures from Warner Bros and production company 3 Foot 7 show that the production costs were NZ$1.1 billion, whilst claiming NZ$191.3 million (£79 million; US$121 million) under Government grants, equivalent to 17%. The Hobbit and The Lord of the Rings films generated a combined total of US$10 billion (NZ$15.7 billion) in merchandise and box office receipts.

Economic Development Minister Steven Joyce defended the decision: “The total production costs…have been quoted recently at $1.1 billion, much of which was spent in New Zealand. The Hobbit movies have been a significant factor in the growth in visitors to New Zealand. In 2014, 14 per cent of holiday visitors to New Zealand selected the Hobbit Trilogy as one of the factors that first stimulated their interest in visiting.”

However, the NZ Taxpayers Union criticised the expenditure: “If New Zealand is going well out of subsidising the film industry, we’d be the only country that is – because the international literature [shows] that it is a very poor return for subsidising box office films.”

Finally, a spokeswoman for the Green Party also joined critics by saying that “It seems like the Government isn’t doing any real cost benefit analysis on these policies, it seems as though they did just cave to pressure from Warner Brothers. I am a Tolkien fan and I think it’s great for New Zealand that those films were made here in New Zealand, it is probably good for tourism. But that doesn’t mean that our Government should be handing out hundreds of millions of dollars to film companies that are making billions of dollars.”

Original story: New Zealand Herald

About the Author: Shaun Gunner

Shaun is the current Chair of The Tolkien Society. Elected in 2013, Shaun regularly speaks about adaptations of Tolkien’s works whilst passionately believing the Society needs to reach out to new audiences. In his spare time can be found in the cinema, playing video games and Lego, or on Twitter.