Thursday, July 10, 2003

Why I don't like corporate welfare

NZPols is taking me to task over my recent comments on corporate welfare for foreign film-makers. Her argument is that this is a a good move for New Zealand; that attracting big films here will not only create jobs, but bring in tax revenue from those jobs, and from secondary and onflow spending. Or, as Rohan Quinby puts it on Scoop:

it seems that after years of ideological confusion, many on the left in New Zealand have forgotten what social democracy is all about. An incentive programme is an example of using the power of the state to deliver economic benefit for your country.

Have I forgotten what social democracy is all about? I don't think so. I still think it's about helping the poor, rather than wealthy multinational corporations.

It's not that I'm opposed to economic incentives per se (I'm no market purist); I object chiefly to the recipient in this case. Jim Anderton's "jobs machine" supports local companies and (ideally) helps them to grow - it's aim is to build something of lasting value to the New Zealand economy, that will stay here and produce benefits for decades to come. The film industry package, OTOH, isn't growing anything. It produces no infrastructure, no lasting investment. The model is that the film-makers come, utilise our subsidised, low-wage, non-unionised, scenic backlot, and fuck off overseas again, leaving nothing but a few stories for the women's magazines and a bunch of people looking for the next job. It's basically strip-mining.

It's also, as I said in my original post, a mug's game. The film industry is as close as you can get to a factory on a barge. By offering subsidies, we're exposing ourself to being played off against other jurisdictions to extract even more money - with the fate of all those production crew (and would-be extras) to apply as blackmail. This is not a game we should be playing - it's as simple as that.

(In other words, we should only give incentives to companies that aren't mobile enough to threaten to up and leave to extract a better deal :)

Or maybe I'm just sore 'cos I'm the only guy in the country who didn't get to be an extra in Lord of the Rings.