In a strategic move to solidify its position as a premier global filming destination, New Zealand has announced a significant boost to its film production incentives, allocating an additional NZ$577 million (approximately US$339 million) to its International Screen Production Rebate scheme.
The decision, revealed by Finance Minister Nicola Willis ahead of next week’s federal budget, comes as a direct response to U.S. President Donald Trump’s recent imposition of 100% tariffs on foreign-made films, a policy aimed at revitalizing Hollywood but sending ripples through the global film industry.
New Zealand, renowned for its breathtaking landscapes showcased in blockbusters like The Lord of the Rings trilogy, has long been a magnet for Hollywood studios, thanks to lower production costs and generous government incentives.
The country’s screen sector generates NZ$3.5 billion (US$2 billion) annually, with approximately one-third of its revenue stemming from U.S. productions, according to a March 2025 report from New Zealand’s Foreign Ministry. The industry employs around 24,000 people, making it a vital economic driver.
We are sending a clear message to the world: New Zealand is the best place in the world to make movies, Willis said in a statement. “Bring your productions here to take advantage of our talent and locations.” While acknowledging that industry incentives are not typically favored, Willis emphasized the necessity of the rebates to maintain competitiveness, noting that countries like Australia, Canada, and the United Kingdom offer even more generous schemes.
The funding injection will enhance the International Screen Production Rebate, introduced in 2014, which provides a 20% cash rebate for feature films with production costs exceeding NZ$15 million and television series over NZ$4 million. Productions spending over NZ$30 million and meeting additional economic criteria can qualify for an extra 5% rebate.
The new budget allocation will increase support to NZ$250 million in 2024/25 and NZ$210 million annually from 2025/26 onward, ensuring the scheme’s sustainability.
President Trump had announced controversial tariff earlier this month, which he justified by claiming that foreign incentives were causing Hollywood to suffer a “very fast death.” Trump argued that countries offering tax breaks and rebates were luring American filmmakers abroad, framing the issue as a national security threat and a vehicle for foreign “messaging and propaganda.”
The tariffs, which would double the cost of importing foreign-made films into the U.S., have sparked confusion and concern across the global film industry, with questions lingering about their implementation and scope.
New Zealand’s response underscores its determination to remain a competitive player in the global film market. A 2023 review of the rebate scheme credited it with attracting major international productions, such as A Minecraft Movie—currently the second-highest-grossing film of 2025—and Taika Waititi’s Klara and the Sun.
These projects have injected billions into the local economy, supporting jobs, hospitality, and infrastructure. A 2018 report by the Ministry of Culture and Heritage estimated that the rebate program generated a net economic benefit of NZ$336.1 million in its first three years, with productions spending an estimated NZ$5.2 billion in New Zealand by 2022.
Globally, the tariffs have prompted varied responses. Australia, another key filming hub, has pledged to advocate for its screen industry, which benefits from a 30% federal location offset and additional state incentives. The Australian government has committed A$540 million in tax incentives since 2019, attracting films like Marvel’s Thor: Love and Thunder and Universal’s The Fall Guy.
In the UK, where film production was worth £5.6 billion in 2024, industry leaders are bracing for potential disruptions, while Canada’s film sector fears a “devastating impact” if U.S. productions pull out.
Industry experts remain skeptical about the tariffs’ practicality. “It’s hard to know how a tariff like this would be imposed, given how intertwined the global film industry is,” said Charlie Keil, a professor at the University of Toronto’s Cinema Studies Institute. Questions persist about whether the tariffs would apply to films shot partially abroad, how they would be calculated, and whether they would extend to streaming platforms like Netflix.
Some speculate that the policy could reduce the number of big-budget productions globally, as studios grapple with increased costs.
WHAT YOU SHOULD KNOW
As New Zealand doubles down on its film industry, the global screen sector braces for uncertainty. With Trump’s tariffs looming, New Zealand is positioning itself as a resilient and attractive contender.
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