On 31 July 2023, Manatū Taonga and Hīkina Whakatutuki Ministry of Business, Innovation and Employment (MBIE) released further details about changes to the New Zealand Screen Production Rebate which were announced in May.
Details of improvements to screen production rebate revealed, 31 July 2023
'Supporting a strong future for screen sector', 20 May 2023 (Beehive)
On this page:
Rebate name change
- The New Zealand Screen Production Grant is being renamed to the New Zealand Screen Production Rebate to more accurately reflect that it is a rebate on spending in New Zealand by Kiwi screen companies and international production houses.
Domestic rebate changes
Access to other government production funding
- All domestic screen productions will be able to access the rebate alongside other government funding such as from NZ On Air, Te Māngai Pāho and the New Zealand Film Commission.
- No additional limitations or constraints will be placed on access to other government production funding alongside the rebate, besides those that already apply to the relevant funding streams.
- Productions that begin principal photography on or after 31 August will be eligible to receive both the rebate and other government production funding.
- These transitional arrangements accommodate, and will be reflected in decisions relating to, NZ On Air’s current special scripted round.
- The New Zealand Film Commission is aiming to have revised criteria published before 31 August, reflecting this and the other changes Ministers have agreed to make.
Technical changes to domestic rebate
Three additional technical changes will be made to the domestic rebate criteria. These changes will address a some of the issues raised during the Review and in public consultation, to help future proof the scheme.
All technical changes will also come into effect on 31 August 2023. The New Zealand Film Commission is aiming to have revised criteria published before this date.
Interim rebate payments
- Domestic productions will be able to apply for an interim rebate payment. This change builds on the success of interim rebate payments for COVID-affected productions.
- To be eligible, at least 50% of the expenditure threshold for the relevant production format needs to have been spent, and the New Zealand Film Commission will need to be satisfied that the production will be completed.
- 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.
- Productions that begin principal photography on or after 31 August 2023 will be eligible for interim payments under the new provision.
Cap on ‘Above-the-line’ costs
- The change will re-introduce a cap on ‘above-the-line’ costs that can qualify for the domestic rebate, at 25% of the production’s budget.
- To minimise any unintended consequences, the cap may be exceeded in exceptional circumstances. The New Zealand Film Commission will develop guidance to support this discretion to be exercised fairly and consistently.
- ‘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 cap will apply to productions that have not received an acknowledgement of their provisional certificate application by 31 August 2023.
Market attachments
- The ‘market attachment’ requirement will be tweaked to recognise legitimate sales, distribution and licence fees from related parties, provided the parties are operating truly independently from one another.
- This change recognises changing market relationships in the New Zealand screen sector, while still ensuring the rebate goes to productions that have the best chance of reaching audiences and performing well commercially.
- The change will apply to productions that have not begun principal photography by 31 August 2023.
International rebate changes
Changes to the 5% Uplift rebate
The 5% Uplift rebate provides an additional incentive to attract medium to large international productions which provide significant benefits to our domestic screen industry and wider economy.
Streamlined process
- The new process for productions applying for the Uplift will be simpler to navigate and provide more timely decisions.
- 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.
- The New Zealand Film Commission will continue as the first point of contact for this process. The application process and test criteria will be available on its website before 1 November.
Updated points test
- To receive the 5% Uplift rebate productions must meet a minimum threshold of points in a ‘test’. Key changes are summarised below, and more detail is included in the policy criteria for the updated test, which is available on the MBIE website.
- Points: Productions will need to achieve 40 points from a possible 85 points available. Previously it was 20 out of a total of 35 points. The points relate to clear and objective criteria in the test.
- Flexibility: The test provides more flexibility for productions to choose which activities and sections of the test to focus on, reflecting the unique nature of different projects. There will no longer be minimum requirements in every section of the test.
- Objective criteria: Updated criteria clearly explain what activities are required and what level of activity. In particular, there is more clarity in the test on innovation, infrastructure and tourism and screen destination promotional activity.
New Zealand Screen Production Rebate: Uplift criteria (MBIE)
New or strengthened criteria
- Workforce development: Specific skills and training requirements are included in the updated criteria, targeting workforce development at different career stages. Previously there was 1 mandatory talent development point. Now there will be 4 specific skill and talent development areas worth up to 6 points.
- Māori cast and crew: There will be points relating to the appointment of Māori into cast and crew positions.
- Sustainability: Sustainability criteria has been introduced in the new points test, supporting the shift to a low-emissions economy. A sustainability plan will be mandatory.
- Repeat activity: In addition to points for past activity there will now be points for sequels or episodic content. Points are also being introduced for leasing studios into the future demonstrating commitment to future repeat activity in New Zealand.
- Criteria removed: Some criteria have been removed including the total production budget spent in New Zealand, and the inclusion of New Zealand characters and settings.
- Mandatory requirements: Productions must have a minimum $30 million Qualifying New Zealand Production Expenditure to be eligible for the Uplift and must meet the one mandatory sustainability criteria. Other mandatory requirements have been removed, providing more flexibility and reflecting the needs of different projects.
Review of the updated Uplift test
- There will be a check-in after 1 year to make sure the changes are working smoothly.
- There will be a regular assessment of the Uplift every 3 years so it remains current and reflects the government and screen sector’s priorities. This does not mean another review of the New Zealand Screen Production Rebate but every 3 years an opportunity to assess the benefits being delivered and the value generated for New Zealand through the Uplift.
Timing
- Applications under the new Uplift settings can be made from 1 November 2023.
- The New Zealand Film Commission will provide the necessary documentation and guidance for applicants before this date.
Changes to the Post-Production, Digital and Visual Effects Rebate
- The rebate will return to a flat rate of 20%, making it more competitive.
- The qualifying expenditure threshold will drop from $500,000 to $250,000, enabling smaller productions to benefit from the rebate and supporting the growth of PDV businesses in New Zealand.
Timing
- 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.
- The PDV changes will be formally incorporated into the new rebate criteria (which will also include the changes to the Uplift). These will be published as soon as possible before 1 November 2023.
- However, these PDV changes will be backdated to come into effect on 31 August 2023, for productions that begin their ongoing schedule of PDV activity on or after that date.
Updated on 31st July 2023