Government considers film industry cap

The Government is considering capping how much it subsidises the film industry.

Hundreds of millions of dollars of taxpayer money has been shelled out to Hollywood film studios over the past decade.

But the industry would likely go under if the Government were to pull the scheme.

A spokesman for Economic Development Minister David Parker says it's a complicated proposal.

"We accept that the [scheme] is necessary to have major films made in New Zealand... We will consider whether the annual total subsidy should be capped, but that is itself a complicated question."

Film producers can claim back up to a quarter of their spending when working in New Zealand. That means the Government is forking out, in the case of the Hobbit trilogy, up to $200 million.

The New Zealand Herald reports the scheme contributed around $3 million to Scarlett Johansson's rumoured $25 million salary while filming Ghost in the Shell in Wellington two years ago.

ACT leader David Seymour says we should axe the whole thing.

"It's unacceptable that a young couple saving for a mortgage, for instance, are paying tax so that Scarlett Johansson, for instance, can take home a bigger pay cheque."

A new report commissioned by MBIE says the subsidies more than pay for themselves in tourism, employment and work for local companies.

Lead author of the report, Vhari McWha, says it's nearly double the benefit compared to cost.

"We see around about twice the benefit as compared to how much the Government's paying."

Ms McWha says nearly all of that would fall away if the system was pulled.

"Around about 90 percent are likely to not come to New Zealand we found, so again you would probably question the viability of the industry without that grant.

"We used to be right at the top and now it's much more competitive, so there's a few places that you can get that really highly skilled technology and the technical innovation."