THE FILM TAX

Hokitika Guardian, 30 July 1930, Page 8

THE FILM TAX

MR BEAUMONT SMITH’S VIEWS

CHRISTCHURCH,-. July .28

“The Budget, so far as it concerns the picture business of. New Zealand is a , bombshell!” said Mr Beaumont Smith, managaing, director of Williamson Films , (N.Z.) limited. “The , picture industry fully expected to bear its legitimate share with everyone else in the inevitable increased taxation, and was prepared willingly to bear it, but it never dreamed it would be singled out by the Government in what amounts to virtually State conlisea-. tiori. Time after time, members, of the Government and other members of Parliament equally. Unenlightened on this •subject have stated that from 40 to 50 per cent-, of the receipts of theatres is sent out of the country. This has been denied from time to time, out- the ml * pression still persists arid is believed in many quarters.

“ERRONEOUS 'IMPRESSION.”

“I stated six months ago that this impression was erroneous, and that the average film hire paid. by a theatre was .25 pet cent, of the .gross receipts, and often fell as Tovf ,as 15. .-per cent. Out of this all charges . for. handling the film, such as duty, freights salaries to a host of New ..Zealand employees, railway transport, etc., had to ibe paid. lam not voicing ■ tlie views of. a theatre owner. The New Zealand exhibitor or theatre owner cannot live at the present time without American films as the backbone of-his business, though British films of high standard are being produced ' now. and are giving great and welcome contrast in ■picture entertainment to-day. I have carefully analysed the proposed taxation so far as film,exchanges (or distributors) are concerned, and it is evident that the taxation amounts to anything between 22 per cent, and 30 per cent, of the entire revenue received by the distributors from the picture theatres.- No business can be expected to carry on successfully that has approximately 25 per cent. of. its turnover taken in taxation.

POSITION OF AMERICAN PRODUCERS.

“The : question’ that the theatreowner is vitally concerned in is ‘whether it will possibly pay tlie Aemrican producers to carry on business in a-country where at least one-quarter of their total earnings i.s taken by way of taxation?’ Personally, I do’ not think they can carry on profitably. Additional taxation was expected, anct probably justified on foreign companies operating in New Zealand, but the Government has exceeded all bounds of justification. Should the .local offices of American film exchanges find that it is . impossible to carry on business after the. imposition of this confiscatory tax, and close their . offices, four hundred Theatre proprietors from Whangnrei to the Bluff will., be left without sufficient films to carry on their business. What will be the use of imposing Id on Is tickets, 2d on Is Cd tickets, 3d on 2s, arid so on, if exhibitors have practically no films to place before their patrons ? If the Government intended to introduce a luxury tax in an endeavour to prevent American films coming to tne country, they have every hope.iof succeeding.

“A modification of the proposed film taxation is imperative, otherwise it may be found that the additional revenue the Government hopes to gain will not be forthcoming and the revenue it has derived in the past will be greatly reduced.”

PICTURE FIRM’S POINT OF VIEW.

. AUCKLAND, duly 28. “Very, close to confiscation,” was the comment of Mr S. S. Crick, managing director of Fox Films for Australia and New Zealand, when asked to comment on the film tax proposed in the Budget. Mr Crick arrived by the Niagara on a health recruiting trip, and he remarked that he had arrived in the Dominion at a time when there appeared to be grave trouble in the picture business in consequence of the suggested taxation.

Mr Crick said he could not see how the film houses could pay the duty, nor how the exhibitors could bear the load either. It meant passing on the impost to the public.

“I am inclined to think wiser counsels will prevail in the end,” he said. “A basis is bound to be arrived at, which will allow all parties to go on trading. No Government in any part of the world could exist if they intro-

duced taxation against the law of economics. I feel sure that if the Minster of Finance is made aware of what the film tax will mean he will give. .-the question careful consideration, as I do not think lie wishes to bring about the complete destruction of an industry.

COST OF PRODUCTION

“The cost of production of talking pictures must of necessity bo spread only over countries that can utilise them, and it is quite evident that talkies are being manul'acured for Knglish-speakiiig countries, therefore the percentage of cost becomes great. Owing to the limited field in the days of silent pictures every country could take

them. It was only,a matter of altering the titles to suit the language. I have no objection whatever to British preference, but it must he remembered, that if Britain produced five times as many pictures as her studies are turning out at'present only a small percentage of our requirements would be met. If England makes fifty-two pictures this year, and that : is doubtful, it would be only- sufficient- for one threatre to change its programme weekly, provided each picture was of sufficient merit to show to a critical audience.”

COMMONWEALTH BUSINESS

Speaking of'.; the picture business in the Commonwealth, Mr Crick said that despite the depression attendances, on the whole had kept up, fairly well. Although the actual receipts had fallen the business was not as bad as one might,-have, expected,. Exhibitors were finding it hard, to make, ends meet owing to the high rents, taxation and the money expended in equipping theatres with the necessary apparatus to present talking pictures. Film rental was high on, account of increased taxation.

‘ ‘The {overheads are proving higher than the receipts,” lie said, “and very few exhibitors in Australia are showing a reasonable profit. In these circumstances the Government should leave the industry alone and not force it into liquidation.”

Mr Crick expressed the opinion that all branches, of the industry should meet and discuss the position with a view to arriving at what could and what could not be paid. “Disaster is bound to come,” be said,“ if something is not done.”