THE FILM QUESTION

Hokitika Guardian, 22 September 1930, Page 2

THE FILM QUESTION

FOREIGN INTERFERENCE. WILL NOT BE TOLERATED. \ : K) ’■ v.;l ' AND FILM HIRE TAX. v WELLINGTON, Sept. 18. <lB an interview, the acting-Prime Minister said: “My attention has been drawn to misleading statements in the Press concerning the film hire tax and its effect on the industry, and also references to the boycott of New Zealand by American film organisations. The objections appear to be raised principally on the ground that the new tax will bring in more than was estimated by the Government. On this point I have to say that the revenue fco be derived from the tax during the balance of the financial year is, after all, only an estimate, in which there is no doubt room for differences of opinion, hut if the tax does bring in more than is anticipated by the Government it can only mean that the net rentals, after deducting administrative expenses arid the amount on which irebmfe. tax is payable!, are greater tha 1 was estitnatedi in fact, If the rentals are greater, it simply meatis that the surplus remaining tbr the film companies is greater than if the yield from the tax was less, Thus the 1 renters should be the last to complain of the tax producing more than is ..estimated. The rate of tax is definitely fixed at '25 per cent in the case of American ;sound films, nnd it. is only payable on the actual net rentals received, whether the amount be large or small. “From the budgeting point of view it is inevitable that some items'will produce more and some less than the estimates, and if the Government were to consider making reductions in the items that showed indications of producing more, there would be little hope of balancing the Budget ns a whole.”

“As has previously been explained, the film hire tax, is as near as possible, the equivalent of an ad valorem Customs duty on a sound film, having regard to the fact that the real value of "the film is the amount of the rentals lit will produce in being exhibited. Some films earn large amounts and some very little. Under these circumstances, to have increased the flat rate footage tax by 2d or 3d per foot to obtain additional revenue would obviously be quite inequitable, and, in view of the large clearances from bond prior to the tariff changes, woufd have been largely ineffective from the revenue point of view this year, “On an ad valorem basis at 25 per cent the tax lias been referred to ih the PreSs by representatives of the trade as edftfiSctitdfy arid such as to ffelldef tradjng iri New Zealand qtlite impOs* sfble. As to this, 1 Seed only sav that many articles pay higher ad valorem rates. On apparel and boots, for in. stance, the rate is 47 per cent. “It has been stated by the trade that the threatened refusal by American film producers t-o supply 'filmß to New Zealand is a ‘lock-out’ by the Government and not a ‘boycott’ by the distributors. In this connection the following points have already been made by the Minster of Internal Affairs in reply to a recent deputation on the matter:

.... “(1) That the tax as in New Zealand 'Jbore approximately the same proportion to the rentals received by distributors as did the Australian taxation.

“(2) That New Zealand exhibitors were paying a larger proportion of total rentals than in previous years. “(3) That the increased amount paid by New Zealand exhibitors would be more than sufficient to pay the film hire tax.

“(4) That the net receipts for the present year from film hires, after paying tax, would be double 'the net receipts collected in the silent film days. “Film distributors have, therefore, to explain why the tax in New Zealand is confiscatory and causes a ‘lock-out,’ while the taxation in Australia, involv. ing the same percentage of gross rentals, can be accepted with more or less equanimity. May I also point out that British film producers, who share the principle involved in the tax, have raised no such questions as ‘lock-outs’ and ‘boycotts,’ hut, on the contrary, have assured the Government of their determination to carry on, with the hope that when times are better the Government will agree to review the matter.

“Finally, my attention has been drawn to a published statement as follows : ‘The distributors’ action is not bluff. Having withdrawn under Mr Hays’s instructions, they must stay out until Mr Hays gives them permission to recommence business.’ In this connection, let me say the industry must clearly understand that the Government will not tolerate interference in the domestic affairs of the Dominion on the part of foreign corporations.’’ V GOVERNMENT’S' DECISION. WILL NOT REOPEN INVESTIGATION. WELLINGTON, September 18. Interviewed, Sir Victor Wilson, president of the Film Distributors’ Association, said it was quite correct ho had received a letter from the actingPrime Minister stating that the Government- was not prepared to reopen "the' investigation or have an inquiry into the position. ■ Sir Victor Wilson said he hoped to make a' complete statement of the whole case within the next day or so, as be believed not only the trade but the public were entitled to know the

whole of the circumstances of Hie pre sent lock-out in the film-industry. He also saicT he had a cable message from Mr Munro acting manager and a director of the Fox Corporation, to deny that that organisation corn*...plates the purchase of Theatre interests in New Zealand. Mr Munro says-. “We are not interested. Please publish a denial.” CONFERENCE OF AMERICAN INTERESTS. AUCKLAND, September 18. The Government has refused to reopen the question of the film tax, upon .vhicli negotiations have been going on in Wellington since the arrival of Sir Victor Wilson, who stated to-day that he received the Government’s decision at 6 o’clock last night in a letter from the Hon E. A. Ransom, acting-Prime Minister.

Sir Victor Wilson thereupon cabled to New York a summary of the position, and lias since been advised that the representatives of all the film interests affected by the decision will meet in New York at noon to-day to consider it.

Sir Victor Wilson said lie is desperately sorry that a way out of the difficulty could not be found without throwing the industry in this coltntrj into such ail impasse. He will make a full statement ott receipt of a reply from Amefictt: