The problem over “The Hobbit” movies has been settled. Listen to Oct 22 2010 for some background to the problem.

Last week, the actors’ union said that the real reason Warner Bros was coming to New Zealand was to try to get a tax reduction from our government. When the agreement was made with Sir Peter Jackson to make the movies in New Zealand, the Kiwi dollar was low but now it is about US76 cents to the Kiwi dollar. Also, some other countries, like some Eastern European countries, offer better tax reductions than New Zealand for making movies in their country. However, Warner Bros said that the problem was worry about the actors going on strike.

It is true that members of the actors’ union were not happy with the individual contracts they had with the film company but they have promised not to go on strike during the filming. The Prime Minister talked with Warner Bros and said that the government will change the law about individual contracts for actors working in films. Helen Kelly from the New Zealand Trade Union is worried about changes to the employment law.

But the problem was also about money. The Prime Minister announced tonight that the New Zealand government will give Warners an extra $33.5m in tax reductions. This includes spending $10m on advertising each movie, partly to encourage people to see the movies but also to encourage tourists to come to New Zealand.

Questions

1. Why do we have trade unions?

2. When the Kiwi dollar is high, who benefits? When it is low, who benefits?

3. Why did the government want to settle this problem with the film company?