Details of the changes to the government-backed New Zealand Screen Production Rebate (NZSPR) were released today by Hīkina Whakatutuki Ministry of Business, Innovation and Employment (MBIE) and Manatū Taonga Ministry for Culture and Heritage (MCH).
The changes to the NZSPR are focused on generating economic and cultural benefits for New Zealand.
With the new settings announced, Te Tumu Whakaata Taonga the New Zealand Film Commission (NZFC), as the administrator of the NZSPR, is focused on fast and effective implementation to ensure the benefits to the sector and New Zealand are realised quickly.
The NZFC recognises that it is important that the implementation is simple, clear, and straight forward to garner confidence in the sector both in New Zealand and offshore. We will work with industry members to ensure implementation is clear and effective.
MBIE and MCH will conduct one-year operational focused check in to ensure the changes are operating as intended.
Summary of new settings
International productions
The redeveloped 5% Uplift will enable New Zealand to attract high value international productions and generate greater economic and cultural benefits for New Zealand.
The redeveloped 5% Uplift:
- Is simple to navigate, and the criteria is clearer and more objective.
- Has increased opportunities to earn points in the test.
- Has increased weighting on New Zealand screen workforce development and production activity.
- Recognises repeat business to encourage studios and productions to return.
- Introduces sustainability criteria to support Aotearoa New Zealand’s shift to a low-emissions economy.
Applications open for the redeveloped 5% Uplift on 1 November 2023, documentation and guidance will be provided before this date.
The Post-Production, Digital and Visual Effects (PDV) rebate returns to a flat rate of 20% and the qualifying expenditure threshold will be reduced to $250,000, creating opportunities to attract a broader range of activity to New Zealand
The new PDV setting will come into effect from 31 August 2023, so productions beginning an ongoing schedule of PDV activity from that date will be able to benefit.
Domestic productions
Domestic productions benefit from the confirmation of funding changes that will bolster New Zealand content by allowing productions to access the NZSPR as well as production funding from NZFC, NZ On Air and Te Māngai Pāho.
There are three technical changes also being made to the domestic criteria:
- Making permanent the allowance for Interim rebate payments, following the success of this through COVID. This recognises the benefits of allowing production loans to be repaid earlier.
- Introduction of a cap on ‘above-the-line’ costs that can qualify for the domestic rebate, at 25% of a production’s budget, to provide a clear and consistent way to assess claimed costs.
- Update to the 'market attachment' requirement, which ensures government support goes to productions that will reach audiences, to recognise sales, distribution and licence fees from related entities – provided they are operating independently.
To ensure these benefits start flowing as soon as possible, changes, except for the above the line changes, will come into effect on 31 August 2023 for productions that have not begun principal photography at that date.
Further details
International Productions
The 5% Uplift provides an additional rebate to the current 20% to attract international productions which provide significant benefits to our domestic screen industry and wider economy. Key changes to the Uplift include:
- A streamlined process: From 1 November eligible productions, with a minimum of $30 million Qualifying New Zealand Production Expenditure, will be able to submit applications. Applications will be considered by the New Zealand Screen Production Rebate Panel, using clear and transparent criteria.
- More flexibility: The test will offer more flexibility to meet the threshold for the Uplift, reflecting the unique needs of different projects. With 85 points available there are more opportunities to meet the Uplift 40 point threshold.
- More objective criteria: Updated criteria will make New Zealand’s expectations clear, so productions know exactly what level of activity is required.
- Improved focus on workforce development: Specific skills and training requirements are included in the new criteria, with more points available which will help to promote jobs and provide more career development opportunities for New Zealanders.
- Māori lead cast and personnel: The introduction of points for Māori appointed in lead cast or above the line personnel and crew.
- New sustainability criteria: This includes a mandatory requirement for a sustainability plan, reflecting New Zealand’s priorities and goals.
- Repeat activity: Widened incentives for repeat activity will encourage studios and productions to return to New Zealand
Domestic Productions
- More cashflow: Interim rebate payments can help producers repay loans earlier, minimising ongoing interest costs, and freeing up cashflow for the remainder of the production.
- Cap on above the line: ‘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% of a production’s budget. To minimise any unintended consequences, the limit may be exceeded in exceptional circumstances. The NZFC will develop guidence to support this discretion to be exercised fairly and consistently.
- Market attachment definition update: 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.
- Timing: 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.
For the policy announcement and further information please go to the MCH website.