Hobbit budgets

Wednesday, January 23rd, 2013

Eric Crampton discusses hobbit budgets:

I do not know how much NZ central and local governments spent on Lord of the Rings and on The Hobbit. There are conflicting reports, and nobody seems particularly clear on how much was subsidy in the sense of “they paid less in tax than they would have if they were some other business, but they might not have come here without it, so we don’t know if the net effect on total taxes paid was positive or negative, but we’re going to assume a counterfactual of that it would have been done here and assess on that basis” and how much was a straight-up grant. Gordon Campbell reports that, for LOTR, it was done as tax rebate and that it’s now a grant. I’ve seen other sources counting a GST concession as a Hobbit tax break, but all products and services produced for export are GST exempt so inputs for that export product would always get a GST rebate. I’d love to see an authoritative figure.

But it can be useful to put the figure purported for The Hobbit into a bit of context. The most commonly cited figure for government support for The Hobbit is $67 million. I do not know whether this was a cash grant based on a proportion of their domestic expenditures, a tax concession, or something else. But I do know that for the 2012/2013 budget year, Vote.Tourism allocated $83.9 million for marketing New Zealand as an international tourist destination.

Imagine that the only benefit we get from the whole LOTR/Hobbit franchise is as tourism marketing campaign.

For 2012/2013, which did more to market NZ as an international tourist destination: The Hobbit, or everything else the government might have done in tourism promotion? Which seems more likely to inspire travel to New Zealand: 100% Pure, or Middle Earth?

Read the whole thing for the marginalia, including his idea for a film.


Leave a Reply