New Zealand divided over govt deal to keep Hobbit

Thu Oct 28, 2010 10:20am EDT
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By Gyles Beckford

WELLINGTON (Reuters) - The New Zealand government began debate on changes to labor laws on Thursday, drawing both praise and outrage as it moved quickly to seal its bargain with Warner Bros. and keep the big-budget Hobbit movies.

Fearing the loss of the estimated $500 million two-film project and damage to the reputation of New Zealand's fledgling film industry, Prime Minister John Key negotiated a deal announced late on Wednesday.

A short-lived union boycott brought Warner Bros. representatives to New Zealand, part of a review of its decision to shoot Peter Jackson's two-part adaptation of J.R.R. Tolkien's fantasy there.

Included in the agreement was an offer of $25 million, some $15 million of that in tax breaks, and the law changes, which are being pushed through without the normal process of referral to a parliamentary committee and public submissions.

"(It is) a solution that will enable Warner Bros and the international film community to restore their confidence in the New Zealand screen production environment," said Penelope Borland, chief executive of the Screen Production and Development Association of NZ.

Jackson, whose adaptation of Tolkien's "Lord of the Rings" trilogy was shot in his native country and garnered major international publicity for New Zealand, as well as winning him and his team 11 Oscars, said he was thrilled and grateful.

But union officials, who had given assurances that the films would not be hit by industrial action, were outraged.

"That a foreign corporation can come into this country and demand that workers' rights in this industry be removed...that's effectively what's going to happen today," said Helen Kelly, the head of the Council of Trade Unions.   Continued...

<p>Elijah Wood as Hobbit Frodo in a scene from "The Lord of The Rings: The Fellowship of The Ring". REUTERS/Handout</p>