Estimates Debate — Economic and Regional Development

Madam Chair, thank you for the opportunity to take a call in this debate as the chair of the Economic Development, Science and Innovation Committee. I’ll give a brief overview of what we heard from the Minister in the committee, and then I’ve got three questions to pose to the Minister.

First of all, for the benefit of the committee, previously, responsibility for economic development and regional economic development were in separate portfolios. However, those portfolios have been combined into one portfolio for 2021-22. The funding in this Budget, we heard, supports economic development and the growth of international business and leads to procurement reform and public sector property management.

The main appropriations we heard from the Minister were $696 million for the Ministry of Business, Innovation and Employment (MBIE) to fund activities administered by Kānoa, which is the regional economic development and investment unit, including money for the Provincial Growth Fund, infrastructure projects, strategic partnership, and other areas. Also there’s money in the Budget for MBIE to provide policy advice and other services. There’s $262 million for New Zealand Trade and Enterprise (NZTE)—and I’d like to just acknowledge the excellent work that NZTE do in terms of promoting New Zealand businesses on the international stage—and also $187 million for the New Zealand Screen Production Grant, which I will talk about a little bit more soon.

The New Zealand Screen Production Grant encourages film businesses to invest in New Zealand. We are seeing a lot of interest in New Zealand from overseas film companies, and I think some of the key reasons we’re seeing that is because we have a rule of law, we’ve had an excellent COVID response, and the film companies—like Amazon, for example—are particularly interested in what’s happening here in New Zealand, and they’re interested in investing. We’ve seen The Lord of the Rings filmed here previously to great success, and further Lord of the Rings work is being done at the moment.

Some international productions can qualify for an additional 5 percent rebate, which is what we heard from the Minister, and to be eligible they must reach certain levels of production-related spending in New Zealand, pass the significant economic benefits test, and provide value to New Zealand that meets or exceeds the size of a 5 percent uplift. So we heard about that policy, which I think was particularly interesting, as we diversify our economy and move into this high-growth area in terms of film.

I have three questions for the Minister. The first one is: we heard in the Estimates hearings about the importance of building digital capability to support small to medium sized enterprises (SMEs). Now, as we move into more of a digital age, it’s becoming very difficult for SMEs to compete with other SMEs if they don’t have a strong digital capability. The Minister just touched on this a little bit in the hearing, but I’d like him to please elaborate on specifically what the Government is doing to help small businesses in this area of becoming digitally enabled.

The second thing we heard in the Estimates was around the importance of Government streamlining procurement processes for companies around New Zealand. So I’m interested in how the Budget is improving a business’s ability to bid for Government contracts during procurement processes and how these improvements will help Māori and Pacific businesses, in particular.

The third question I’d like the Minister to please touch on is the aspect around industry transformation plans. So the Minister touched on that briefly in the hearings, but I’d like him to please elaborate on what this will mean for industries—first of all, specifically why the Minister has undertaken this work on these industry transformation plans, and what it will mean for industries, particularly like manufacturing, for example. So I’m interested in how the Minister will implement these to support New Zealand’s economic recovery from COVID. Thank you.

Thank you very much. I mean, we’ve got great economic development progress in front of us. There’s a whole lot of work that needs to be done, and we’re up for it.

But let me answer the chair’s specific questions to start with. What we found during COVID is that businesses that were digitally enabled had an immediate advantage over businesses that weren’t digitally enabled. What McKinsey & Company—which is an American consultancy—found in the States, which I think is probably mirrored in New Zealand, is that there was about five years’ worth of digital enablement compressed into eight weeks as businesses sought to be able to generate revenue through some way, shape, or form. This happened in New Zealand through the click and collect. But what we found is that we need to move forward in terms of digital enablement.

There’s something called the digital adoption curve. It’s your stock standard bell curve. But that’s been turned on its head as businessmen and women who, in the past, would have no interest in digital enablement because they’ve been doing something the same way for years, and, as far as they’re concerned, there was no place in their business for digital technologies, have now found that, in fact, in order to do business in this country, you need to have some form of digital competency. I used to say before COVID, but, certainly, this has amplified since COVID, that I truly believe that this will be the last generation of small-business owner that will survive, let alone thrive, without being digitally enabled. The reason I say that is everything we are doing, every innovative thing we are doing across Government to support business is based on a digital platform, whether that’s paying your taxes through Business Transformation in Inland Revenue, whether it’s through procurement, whether it’s through e-invoicing, the New Zealand Business Number, it all rests on digital platforms.

But we do also recognise that there are a number of small-business owners that, in fact, have not started on that digital journey and are not too sure how to start on that digital journey. So we’ve set up something called Digital Boost—$44 million in the Budget—and it is a fantastic programme. Actually, it’s more a project where there are a whole lot of videos online that business owners can jump into at any stage of their digital journey right from the very beginning, all the way through. They can do it in their own time, in their own space. There is a support team that they can call to get answers if they’re a little bit stuck. One of the things that’s made it so successful is there are a whole lot of case studies online from people like Stan Walker, for example; Ardie Savea; Julian Savea—I think it’s Julian Savea, actually, who’s a small-business owner himself— Mils Muliaina; you know, these iconic New Zealanders who are actually small-business owners in their own right. They’re on board saying, “You know what. This is a great, innovative effort. Jump on board. Have a look. It’s easy. Do it in your own time.”

Because what we do know is if we ask people to turn up to classrooms or we provide a whole lot of esoteric products, then people aren’t going to turn up. It needs to be done in their own time. So one of the major drivers in the small to medium sized enterprise (SME) sector for this term is that digital enablement. So far, over 25,000 businesses or people, individuals, have taken it up, and it’s spreading. But this is vitally important for businesses to operate in the 21st century. As we have heard today, you know, COVID is not over as far as we’re concerned. Businesses need to be ready just in case, but they also need to be able to drive efficiency. This is what this will do. It’s not necessarily about employing more people. It’s not necessarily about increasing productivity. It’s just driving efficiency. Craig Hudson, for example, the CEO of Xero, has said that, you know, a lot of his clients—this is the same for MYOB and other accounting practices, I must say. But Craig Hudson has said that all the businesses on the Xero platform create a whole lot of data, but very few businesses actually use those data to make informed business decisions. So digital enablement is really important.

You talked about the ITPs. So there are seven ITPs; these are industry transformation plans. These are areas where we believe as a Government we can do a whole lot better, whether that is driving productivity, whether that is increasing or gaining some form of global competitive advantage, but it’s working with key stakeholders, iwi, Government, of course, key stakeholders, bringing them together in a dialogue around how we can do things better. Now, we’ve allocated a lot of money for this in the Budget. It’s a very serious process. Out of this will come a series of recommendations around driving productivity growth, gaining some form of competitive advantage, and being where we need to be as a nation, positioning us forward. Because one thing we have done, and one of the first things I did when I took over this portfolio was to say, “What is the role of Government in driving economic growth, and does the Government actually have a role in terms of driving economic growth?” I quickly came to the conclusion that in a country of 5 million, and certainly in the COVID environment, we have a really important role of getting those settings right so businesses can be as good as they possibly can.

In the ITPs we’ve got the construction sector, we’ve got AgriTech, we’ve got advanced manufacturing, we’ve got food and beverage, we’ve got forestry and wood processing, and we’ve got tourism. All these areas are areas that we know we are experts in. These are areas that we can do better. We have global competitive advantages in some of these.

I mean, food and beverage, for example—you know, we go to the world with what I think is one of the iconic brands. The reason why the primary sector is doing so well in a COVID-affected world is because people trust the integrity of “Brand New Zealand”. Now, what we must do, though, is leverage off that brand and do better, capture more along that whole supply chain and determine what parts of that supply chain we need to own, where we can do better, where we can mechanise, and how we can really enhance that global competitive advantage.

Forestry and wood processing is an area that I’m in charge of, obviously, in another portfolio, but again, that is an area where we are about to become the world’s largest exporter of logs. Now, we believe there is an absolute potential to capture so much more margin and value down the supply chain. But at the moment, it’s not happening. So we’ve gathered a whole lot of people together and said, “What do we need to do? What incentives do we need to put in place? What settings do we need to change in our economy? What incentives do we need to put in our economy that will allow us to process more logs into lumber that goes into our market, as opposed to sending logs offshore?” If it was simply a matter of importing timber offshore—

💬 Hon Todd McClay: Most of the ones we export don’t go to lumber, do they?

—then the world would be an easy place. But we want to cut up a lot of these logs, like we do in your neck of the woods, Mr McClay. I mean, the interesting thing is, actually, the largest investment into wood processing is in New Zealand in Red Stag Timber, and we’ve supported them. It’s fantastic. But we need to ensure that the settings are right, so those who want to invest in wood processing can do it. Hence just one of the examples of the industry transformation plans.

Now, the other point you mentioned, the other question around procurement—so the Government spends about $51.5 million a year. Of course, we’re the largest spender in this economy—

💬 Hon Todd McClay: A billion dollars a year.

—a billion dollars a year, sorry. We need to ensure that we get this right, have a sense of transparency in how we’re doing this, but also to ensure that it meets a lot of our wellbeing targets and our objectives and our philosophy as articulated by our Minister of Finance and Prime Minister.

Now, at the moment, I’m not 100 percent confident that we are getting best value for money. In the past, what’s happened—and the Hillside workshops are a classic case—is Governments have said the lowest price gets the tender. You know, from some sort of metrics you could say, “Well, that makes sense.” But as we often know, the lowest price is not necessarily the best price, and Hillside is a classic case. The previous National Government decided we’re going to scrap Hillside, we’re going to buy a whole lot of trains from China. A whole lot of trains from China, they came in, they were filled with asbestos—

CHAIRPERSON (Hon Jacqui Dean): Order! Order! I’ll ask the Minister to stick to within the scope of the Estimates debate.

OK. Thank you. So what we want to do with procurement is actually be a little bit more targeted to ensure that all our communities actually benefit from Government procurement. A classic case is—you know, this is a hypothetical case, but it goes to the point—for example, if the Ministry of Business, Innovation and Employment went out and said, “We want to do a national catering contract.”, then there would be very few businesses that would have the ability to actually take on board a national catering contract. But if we chunk it down into the regions, then what we do is we empower a whole lot of SMEs to actually get involved in Government procurement and be part of the whole system, which will allow us again to empower SMEs, empower regions, and drive growth in a way that has benefits over and above the pure cost one. As mentioned, just because it’s the cheapest, it doesn’t necessarily mean it’s the best.

So we’ve been looking at things like apprenticeships. You know, who are the owners of these companies? We’ve already been very clear. We want to empower Māori SMEs to be able to be in a position where they can bid for these contracts. We want to empower SMEs so they can be part of the whole procurement process as well, because we believe that the Government can be a really strong enabler in the Government procurement space to drive the sort of changes in our economy as well. A classic case is Minister Shaw and I co-chair the carbon neutral State sector 2025 drive. That is a classic example of using Government procurement to drive the sort of outcomes that we believe are necessary to be as good as we possibly can be.

The last thing I’ll mention to that is Government procurement—

💬 Hon Gerry Brownlee: Give us one example.

I’ll give you an example, Mr Brownlee. Thank you very much for the opportunity. Any building that is built by the State or for the State over $9 million we have said it must be built from the lowest-carbon product. So it’s basically a wood-first policy. It is fantastic because it will make sure that we walk the walk. If only you had built Christchurch back in wood, it could be a 21st century—

CHAIRPERSON (Hon Jacqui Dean): Order!

Madam Chair, thank you. Minister Nash, I want to come to the conversation we had in committee around The Lord of the Rings and Amazon and the filming of the first series. Your Government decided to give an extra 5 percent take-up of the money that Amazon would spend in New Zealand to them, over and above the scheme that was put in place by the National Government that has brought many films to New Zealand. I asked you at the time why an extra 5 percent was given, and we asked when the filming started. It’s important the taxpayer gets to know whether or not commitments were made before filming started or afterwards. Your official said he thought—in fact, he said—filming started in the latter part of last year. Newspaper reports had suggested filming had started earlier in the year. I’d like to ask you, Minister, if you could clarify exactly when filming started on the Lord of the Rings series.

Thank you very much. I can’t tell you the exact date filming started, but what I can tell you, as the member Todd McClay has outlined, is that Lord of the Rings received about $160 million in grants from the Government, but they spent $650 million, and the memorandum of understanding (MOU)—

💬 Hon Todd McClay: Is that the extra 5 percent?

So $160 million is the total amount that they received, including the extra 5 percent. But the $650 million is how much they spent, and what this has done is it’s created—we signed quite an innovative MOU with Amazon when we went into the deal. There are a number of things that Amazon have said that they will deliver: internships, for example, and technology transfers. We can use some of the filming from Lord of the Rings to promote New Zealand. An interesting fact, which is quite enlightening, actually, is the Lord of the Rings movies and the Hobbit movies, as opposed to the series, which has just been filmed—I think it’s about 17 percent of visitors to this country—

💬 Hon Todd McClay: Higher.

—or is it 19 percent?—said they came here, they came to New Zealand, because of what they had seen from Lord of the Rings. So what we do know is the power of such a successful production like Lord of the Rings has the ability to add significant value to our economy.

Thank you. Minister Nash, there’s no question that the scheme the National Government put in place is a good one, and brings a benefit to New Zealand. Your party opposed it at the time, but I’m very pleased you’ve decided that it is worthwhile. I want to come back to my question, though, because the Government decided to give an extra $100 million to Amazon for the filming of this series in New Zealand. You said there was no commitment to any future series, and it was quite unusual for that to happen. In fact, Amazon, in other parts of the world where they’ve filmed where they have received subsidy from Government, have committed to more than one series, in the cases of Australia and Ireland. Equally, Minister, you said in committee that there was a concern that they could go somewhere else. You said at the time that this agreement wasn’t signed under you, it was under a previous Minister. In fact, your words were, when I asked you, “No, that was already signed before I came on board.”, and when I asked you when the memorandum of understanding was signed you said it was in April 2020. Do you still stand by that comment given to committee?

Thank you, Madam Chair. There’s a couple of things I’ll say with regard to that. First of all, you are never going to commit a studio to a second series when the first series cost $650 million and we do not know if it’s going to be successful. We’re assuming it is going to be successful, and if it is successful, then they are talking about eight series. They could be here for 10 years filming something iconic. But if it’s not successful, then of course they’re not going to come back. So we can’t pre-empt that; nor would we ask them to.

The other thing I would say is that the member Todd McClay talked about Australia. What I can say happened in Australia is that the Australians actually withdrew all their subsidies, and they lost 97 percent of their film industry. We do not want to be in that position in any way, shape, or form, but we didn’t grant them an extra $100 million. Keep in mind they were eligible for 20 percent. They were eligible for another 5 percent if they met a whole lot of terms and conditions, which they did. But in terms of when they started filming, when the memorandum of understanding (MOU) was signed—the MOU was announced on 16 April this year by myself. I wasn’t part of the negotiation team, but I just think that this is a fantastic opportunity to not only showcase the best of New Zealand but also build a really innovative film industry in this country, provide a level of certainty to those who work in the country, and also prove to the global film sector that we can make the very best in the world. I think from all of those perspectives, it’s been hugely successful.

Minister Nash, thank you. The New Zealand Herald reported that 800 cast and crew were involved in a West Auckland shoot for The Lord of the Rings in March 2020. You said in committee that you weren’t the Minister at the time that this came on board, and the memorandum of understanding was signed in April of 2020. Equally, your officials said that filming started in the latter part of last year, but those 800 cast and crew who were on board as part of the shoot in March of 2020, who had to stand down during lockdown, were already employed. Minister, you said in a committee that the agreement was signed in April 2020, but in a written question to you from me you have confirmed that actually that agreement was signed on 23 December 2020, to give the additional 5 percent uptake after filming had started.

So I ask you clearly, Minister, when filming had already started in New Zealand, why did you negotiate—your Government, when you were Minister—an extra 5 percent when 800 people were already employed in New Zealand? Why did you tell the committee you weren’t the Minister at the time, and it had been much earlier? What additional benefit does New Zealand get for that 5 percent, which is $100 million? And when you just said it wouldn’t be right to ask whether they would do any more series in New Zealand, are you saying you gave them an extra $100 million and didn’t even ask them whether there could be a commitment for more filming in New Zealand of future series?

First of all I would say we didn’t give them an extra $100 million. As I have said, they got $160 million in totality. They spent $650 million. They got $160 million. So what happens is they were eligible for 20 percent. If they met a whole lot of terms and conditions, then they got another 5 percent on the 20 percent. Now, $100 million is not 5 percent of $160 million, Mr McClay. All I would say is this is a fantastic example of New Zealand leading the world in the most expensive TV series ever.

Now, as mentioned, we are never going to get a commitment from a studio to film season two without knowing how successful season one will be. If season one proves a flop, and I very much doubt it will—the trailer’s out there. Take a look at it; it looks fantastic—but if it does, of course they’re not going to come and commit another $650 million. If it is a success, which I have every confidence that it will be, we could see another seven seasons filmed in New Zealand, and that provides a whole lot of certainty to a whole lot of really high-end people. And, again, what it does is it sends a very clear message to the global film sector that we can make the best movies, the best series, in the world, because we have the best people in the world.

Tēnā koe, Madam Speaker. Tēnā koutou e te Whare. I thank the Minister in the chair, Stuart Nash, for his contribution so far. I wanted to ask about three different issues that the Minister alluded to in an earlier contribution. One is the issue around timber processing here in New Zealand. Certainly, out there in the building sector there is a lot of concern that right now it’s extremely difficult to get processed timber, that a large number of sawmills have closed down in recent years, and that in particular cross-laminated timber (CLT), structural timber, which is a huge opportunity for us to deliver the sustainable wood-first buildings in public building—some of those cross-laminated timber outfits have even not been able to make it. So I’m just wondering if the Minister has any more detail on short-term solutions that the Government could engage in to deal with this current crisis as we’re trying to build a lot of homes and we are seeing a shortage of ability to process our own logs and even some forests deciding to cancel contracts to sawmills here in New Zealand in order to ship logs back to Japan, when it’s a Japanese-owned forest, for example.

First of all, I would say—and I’ve been on record as saying this—in the 1980s, when we sold our forests, we actually sold our ability to control a lot of the forest industry. So we’re a little bit of an outlier in the world, actually, in that the State does not own its own forest. It’s almost impossible for us to dictate to any owners what they can and cannot do with their forest. What I will say is that the Provincial Growth Fund has invested money in Red Stag, in their—I think they’re a CLT plant, but it’s certainly an engineered lumber plant, which will have the ability to provide engineered lumber to the house-building sector. We’ve also invested money in Wood Engineering Technology in Gisborne, which has allowed them to put together one of the most innovative plants in the world in terms of processing timber.

So in terms of the Provincial Growth Fund, we have made a lot of investment to get these mills off the ground, so to speak, I suppose. You are right: a number of sawmills have closed over time. Again, it’s difficult for us to put interventions in place to stop these sawmills from closing. Obviously, they don’t approach Government and ask for money, but we’re not in a position to do that. But what the Industry Transformation Plan (ITP) will do is it will take a look at the settings under which people invest in the forest sector and say, “Have we got these right?” If we haven’t got them right, then I expect a series of recommendations to come out of that ITP that I will then take to my Cabinet colleagues to see if we can actually implement them in order to improve the incentives for investing in the forest or in the timber processing sector.

Thank you, Madam Chair. Two other questions about Government procurement policy, and one is around buildings, if it is through your ministry that there could be a signal to have pilots for buildings built to a Passive House standard, particularly schools, or if that’s a decision that is simply left up to the Ministry of Education—just more clarity on how that approach to procurement works. Then the second point is around the—there’s a bus company, bus manufacturer, in Christchurch which actually designs and builds buses, has their own intellectual property, even software, as well as the actual buses themselves. They produce electric buses, hydrogen buses—Global Bus Ventures, GBV. I guess my question is around Government procurement of electric buses, because, clearly, we’ve signalled that we want to shift public transport to being renewable. Councils are in varying positions to be able to make those outlying capital costs, and some have already been making decisions where they’ve prioritised purchasing electric buses from China. There are questions about whether or not those buses have been constructed using Uyghur slave labour.

So I’m just wondering—I heard from Global Bus Ventures, which is an amazing kind of company to have here in New Zealand, employing a lot of different skill sets, that when they’ve tendered for contracts in Australia, they’ve missed out despite having a better product at a better price because states in Australia have a local procurement preference, and yet there’s nothing like that in New Zealand. So I’m just wondering if you see any opportunities through a procurement process to take advantage of some of the skills and grow some of our local talent when it comes to electric buses or zero emissions buses.

Finally, sorry, just on that last point about timber, in addition to supporting timber processing, do you see any potential for supporting renewed public ownership of forests themselves, either at a local, regional or central government level?

Thank you very much. Let me answer those three things, first of all. So, procurement—how procurement works is we set out guidance, OK? So it’s not centre-led. We provide what we think is quite sound guidance around what agencies must do in terms of their procurement, how they must do things. We’re looking at the model at the moment—when I say “we”, myself and Minister Grant Robertson are seeing if this is right. We don’t think we’re going to go back to the national stores where you’ve got to come to the Government if you want to buy pencils, but we do think that the guidance we need to put in place needs to be robust. I mean, I’m looking at the English model, for example, at the moment where in the senior leadership team of large agencies there was a dotted line through to the agency head as well as through to Government procurement. So we’re looking at different models around how we can use procurement to drive the sort of innovative development we need.

In terms of buildings, I think that from the Prime Minister down, we have made it very, very clear we are keen to decarbonise our whole economy, and building is one sector where we believe we can do that. It’s the reason why, for example, as I mentioned to Mr Brownlee, we have a policy in place now, or guidance in place, that if it is $9 million or above and it’s built by the Government or for the Government, it must be built out of the lowest-carbon materials possible, which is, in essence, a wood-first policy. Now, if it is not being built out of wood, then it has to be signed off, and I’m bringing that exemption into my office, so I have complete oversight of this. But the Ministry of Education, I understand, is leading a lot of this. Minister Shaw and myself are leading stuff around Green Star rating for commercial buildings. So we do see the building and construction sector as really, really important in driving the decarbonisation of our economy.

And this comes to your question about the procurement of buses. Now, I can’t speak specifically about that company or situation. I do know that they’re building a hydrogen bus. They’re trialling a hydrogen bus, which is being funded by the Energy Efficiency & Conservation Authority, I understand. So we are certainly working with them in innovative technologies, but, again, when I talked about decarbonising our economy through the construction sector, obviously the transport sector is something that we are working incredibly hard to decarbonise. In fact, there are very strong obligations we’ve got to meet, as you’ll be aware, and we know if we don’t work incredibly hard to decarbonise the transport sector, we won’t come within a bull’s roar of meeting our obligations.

So whilst I don’t know much about the company you’re talking about, I do know that they are absolutely on the radar of the Government. I see Government procurement as playing a really, really important role in terms of driving the change we need in our economy, and this sort of company, from what you’ve mentioned, is the sort of innovative company that I think will be at the forefront of where we need to be in terms of technology.

The last point you made is around nationalising some of our forests. We won’t be buying our forests, but one of the things that I’m looking to do with the new Forest Service is work very closely with stakeholders like iwi Māori, like regional councils, like landowners to plant a lot more. We have to do this under the emissions trading scheme anyway—well, we don’t have to, but it’s something that we’re very keen to do. The Forest Service has identified about 2.7 million hectares of land which should be in some form of forestry, whether that’s a permanent forest sink because of conservation or ecological values or in production forestry because it is simply unproductive to put livestock on that land. So there is a whole lot of land that has already been identified in this country which is more suitable for forestry than any other land use. But I will go back to—it is about right tree, right place. But all the areas that the member has mentioned we are doing a lot of work in progressing.

Minister, I just want to clarify, if you could clarify this for me in the remaining time. Filming for The Lord of the Rings had already started last year, there were 800 people locally employed in production and filming at a time before your Government decided to sign a memorandum of understanding for an extra 5 percent, and that was signed on 23 December when you were Minister. My second question would be: has your Government committed to fund or build any studios or facilities for Amazon and Lord of the Rings as part of this, away from the 5 percent, from tourism funds or Film Commission funds or from the various funds that you have available to you or others in Government to help with this facility?

I mean, I made an announcement last week, I think it was, might have been the week before, of a $30 million investment into two sound stages in Auckland.

💬 Hon Todd McClay: No, I’m asking about Amazon.

It is not specifically for Amazon; it is to increase the infrastructure we’ve got there, to attract a whole lot of different businesses and movies—

💬 Hon Todd McClay: But I’m asking about Amazon specifically.

—into this space. Keeping in mind, that the Screen Production Grant has been accessed by a hundred different film companies. So there’s a lot that’s been done in the space. This is not specifically for Amazon, this is to ensure that we are the best in the world so that we can attract the best in the world. But, as mentioned, at this point in time Amazon has not committed to series two. They’ve finished filming series one, they’ve announced the date when it’s going to be released. If it is successful, as we all believe it will be, then there is the potential for another seven seasons, which is about another ten years’ worth of filming, which I think would be fantastic in terms of providing a level of certainty in an industry which is a little bit precarious. Keeping in mind—and I reiterate—this is the most expensive series ever filmed, the most technologically advanced series ever filmed, and also what it did is it leveraged off the expertise of a whole lot of New Zealand companies, so it actually grew the tech sector, the film sector—86 percent of people on-set were Kiwis.

The other thing I will say is there’s a study that was done in 2020 which showed that 60 percent of money spent by the film industry was spent in other sectors of the economy. So keeping in mind, when Amazon started filming, we were in a very precarious state in terms of our economy. We didn’t know what was happening, right. We were actually forecasting 10 percent unemployment. So these were guys that were going hard out, putting money into our economy, employing a whole lot of people, when we were at a very precarious state of the economy. Look, I’m a huge fan of what Amazon and what Lord of the Rings has done, I think we should be celebrating this, and I’m certainly one to do that.

I move, That the committee report progress.

Motion agreed to.

House resumed.

I move that the committee report progress.

The question is that the report be adopted. I’ll put it again. The question is that the report be adopted.

Motion agreed to.

Report adopted.