Sunday, 18 March 2012

Movie Production Subsidies

I'm generally not in favour of subsidies for trivial things. If you want to go and watch the opera (and I do*), you can pay for the theatre, set designers, sopranos, tenors and orchestras from your own money.

That said, on the subject of movie production subsidies, I think there's often a good case for them which is kinda explained by The Thought Gang over at Worstall's place:-
If we didn’t have special treatment for films, would they have been filmed here at all and, so, rather than support for the movie industry being an example of the state getting involved in things that the state should not get involved in.. is it an example of the state lessening a tax burden and, consequently, encouraging tax-positive activity which, otherwise, would have happened elsewhere.

Exactly. Want to make a film of Wuthering Heights, showing people out on windy moors? You can film it in England, Scotland, Ireland and probably a few places around the world. Kill Bill was largely filmed in China, Rumble in the Bronx in Vancouver and most bizarrely, Full Metal Jacket was filmed at Beckton Gas Works.

So, let's say you pay a million out in subsidy to a JK Rowling film to be filmed here rather than somewhere else. What's the benefits? Well, they're more likely to hire local crew, local actors, all of whom then have to stay near the shoot, get fed. Then there's the tourist angle. Lacock's always had a lot of vistors but the Harry Potter angle has brought even more people in. Tourism in New Zealand overtook agriculture after Peter Jackson's Lord of the Rings trilogy.

But, I'm not sure that subsidies are actually the solution to the problem of production companies choosing between different places. To somewhat echo The Thought Gang's point, they simply fix a problem elsewhere in the tax system that raises our costs. It's far better to get to the root of the problem. Lower the tax burden on work (perhaps by switching to LVT but also reforming the state) and you don't need a subsidy as the cost of hiring people will be less.

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