National arrived in government promising a unified approach to economic growth, but two years into its term The Hobbit debacle revealed a reality at odds with the rhetoric

The National government has developed a liking for talking about this country as New Zealand Inc. It fits with its business-friendly ethos and gives voters the impression of decisiveness and efficiency in tough times. But The Hobbit debacle raises serious questions as to whether New Zealand Inc. is anything more but a political conceit.

If there ever was a time for a performance review of New Zealand Inc. it's now, as we reflect on this nassty business with the Hobbitses. A multi-national arrived in town to negotiate a deal worth three-quarters of a billion dollars. The deal was in the national interest and negotiations were with the Prime Minister, no less.

Indeed, the Prime Minister has said:

An important part of my job is to promote New Zealand, to help build commercial networks, and to develop a sense of where our opportunities lie with the rest of the world.

So how did we – and he – do?

If we judge the deal by the standards of last week, then we and he did pretty well. Despite forking out another $20 million (roughly 3,500 hip operations?), we kept the movies, got a significant chunk of tourism marketing on the side and the national brand was protected. As John Key said, "It was commercial reality. We did the business."

A job well done. In the short-term.

But if we take a step back the view isn't nearly as rosy.

The point of New Zealand Inc. is that we're a small country – we have a small government, small businesses, a small workforce and limited opportunities to prosper. If we want "economic step change" we need to work together to leverage every bit of scale, every relationship, every idea, product or chunk of investment capital or labour we can to get the best deal.

John Key's ambition was for his government to lead those efforts, and he had public support.

The centre-right likes the way New Zealand Inc sounds – tough-minded, with a focus on taking care of business, in every sense of that phrase. The centre-left is sympathetic because it doesn't leave the market to its own devices; it makes government an active player and acknowledges the public sector as an economic leader.

Its first expression was the Job Summit, held to unite the country's economic interests in the face of a global recession that was blowing full force. The summit was to act as a windbreak against that gale; a shindig where public and private sector bosses, unionists and corporates, came together for the good of the country/corporation.

"We know that if we work together New Zealanders will reap the rewards," Key said. "So let's roll up our sleeves, pull together, and get going."

Unions responded later in the year by inviting the PM to speak at the CTU's annual conference. NZ Inc. was muddling along OK. Old enemies weren't going to suddenly become best mates, but there seemed to be a willingness to get along.

Until the National Party conference, that is, and the government's decision to feed the base with the red meat of labour reform. Maybe it was fear that its core supporters were angry over concessions to the Maori Party. Maybe it was Key giving the right-wing of his Cabinet something to chew. Or maybe it was just National being National. But expanding the 90-day law, fiddling with annual leave and sick notes, and limiting union access to the workplace un-did all the bridge-building between the two sides since the 2008 election.

As Fran O'Sullivan has written, cutting union access in particular not only burnt bridges between the government and the unions – and Key and Helen Kelly personally – it scared the villagers and trampled their crops. This Sue Bradford post shows how many on the left viewed the policies at the time.

You might argue that the unions are over-reacting to moderate reform, but their response was utterly predictable and strategically the breakdown in relations was a major blow to New Zealand Inc. (Interestingly, it was a bit like the Hobbit debacle itself, but in reverse, with the government mis-judging unions on this occasion).

Fast forward to last week, and we were left wishing that the tentative truce between labour and capital established at the Job Summit still existed.

Instead, there was no good faith; no sense of New Zealand Inc.

For me, the MEAA had over-played its hand – trying to beat Warner Bros.' full house with a pair of bugger-all. Sir Peter Jackson over-reacted with a refusal to talk and statements full of hyperbole – was it an auter's fit of pique? Genuine business concern? Or just greed and arrogance? I don't know, but it created a crisis. Warner Bros. saw its chance and went for the jugular. Drawn into the fight, the government chose not to mediate, but joined in the union bashing.

So much for New Zealand Inc.

If we'd really been New Zealand Inc. Sir Peter would have sat down and talked, perhaps with the government as facilitator; the MEAA wouldn't have issued an ultimatum; and perhaps most crucially, CEO John Key wouldn't played up the risk of losing the movies (which was always downplayed by the knowledgeable Hollywood media) and mused that the country would have to pay for the union's error of judgment.

By doing so, he undermined his own – and the country's – negotiating position. He'd all but promised concessions before the Warners executives had even arrived. Then, to cap it all off, those executives were allowed to leave the country without a word to the taxpayers who'd so generously handed over another $20 million, the government went into urgency to pass law at the behest of a US corporation and parts of the deal remained wrapped in secrecy.

Which leads me to conclude that when the pressure came on, New Zealand Inc. went out the window. Politics trumped all. New Zealand Inc. got played. The true corporate won.

If the good faith built last year had remained, would we have offered a more united front? Could this have been cut off at the pass? I can't answer that.

What I do know is that such an approach only works if its integrity is protected. That requires political sacrifice, something no party was willing to contemplate.

Which suggests the New Zealand Inc. model doesn't and can't work. The temptation of political gamesmanship will overcome good intentions, short-term self interest is all. After all, a union's job is to fight for its members, not the country as a whole. Businesses need to grow their own bottom-line, not the nation's. And governments have to win elections.

Maybe any hope of them working together is mere Pollyana talk.

But my the strategist and patriot in me still hopes that as a small country we learn the importance of thinking nationally, thinking long-term, thinking in a way that doesn't point-score at the expense of public interest.

And it strikes me that of all the potential members of New Zealand Inc. it's the government that has to be above the fray and lead, and therefore the government that, by its own standards, failed in its duty last week.

It was a good week for the National Party; a bad week for New Zealand Inc.

We need to play to our strengths and work together, or else we'll get played again and again, just as we got played by Warner Bros. last week.

Comments (36)

by Mr Magoo on November 02, 2010
Mr Magoo

I agree except... :)

I cannot help bit think that you are taking the PR line of "NZ INC" and pretending it was ever a reality? Its just a phrase or marketing slogan.

Everybody interprets it differently for a start, but underneath that it is just business as usual.

After all, governments are supposed to run countries for the good of all, right? What exactly has anyone done that goes beyond that? (in some cases even met that definition at all??)

If so then what on earth does it mean?

We are the bosses and you must do what we say as the senior management? You can be fired if you don't like it? We only care about making money at the expense of all else?

The job summit was a fiasco and a PR diversion. Nothing more. And it resulted in nothing of value - not surprisingly.

What else??

by stuart munro on November 02, 2010
stuart munro

You could say that the Hobbit event was unsatisfactory because it was an example of government passivity rather than leadership.

Leadership can be a little scary, but it is clear that the government waited until the furore reached a head before resolving the issue as far as it could.

Whether or not it would have reflected better on the government, an earlier and lower key intervention would have been less destructive of public trust.

The other problem is that this action has illustrated the lack of credible projects to restore the New Zealand economy. With the US printing money like madmen, and Alan Bollard sitting tight on the same monetary policy that put us 30% behind Australia, it would be nice to think our glorious leaders had some kind of plan.

by Tabitha on November 02, 2010

I agree with Stuart Munro in that the government only got involved with this when they really had to. But isn't that a good thing?

When they did get involved, they worked bloody fast. Everyone else was at a stand-off - or had gone to ground, in the case of Actors Equity (not returning SPADA's calls to meet etc.). The government was actually effective when they had to be. I know that grates many people who do not like this government - but in this case I give them kudos.

"If we'd really been New Zealand Inc. Sir Peter would have sat down and talked, perhaps with the government as facilitator;"

The government DID facilitate a meeting, between Sir Peter Jackson and Helen Kelly, at the beginning of October.

"was it an auter's fit of pique? Genuine business concern? Or just greed and arrogance?"

I believe something else. He was singled out and painted as someone who did not respect workers' rights, or unions, which is both patently untrue and unfair. This was at a precarious time - leading up to the "green light" of a project that he has invested more of himself into than he ever set out to do, and that has taken more years and heartache to get off the ground than you probably know. I can't blame him for reacting in an upset and angry way. The fact that the law was technically on his side gave him the impetus to dig his heels in. But seriously, why would he want to "talk" with the people who had no democratic mandate within NZ, who were sleighing his reputation within his industry, and singling him out with threats?

by stuart munro on November 02, 2010
stuart munro

The tax break/currency issue is somewhat separate, in fact there was discussion of it well before the union/PJ dispute arose. Government should in principle have a generalisable policy for film rather than treating each production individually. No surprise that they didn't.

On the PJ thing - there are no good answers. Unions do need to resort to strange things to bring employers to the table sometimes. I don't think PJ is a monster, but the court decision that the contracter was an employee wasn't rubbish either. Looks like a domestic industry dispute though, Oz should not have been involved. Bad handling all round, I'd say.

by peasantpete on November 02, 2010

It appears that several script stories were runningconcurrently.

1. Grand Guignol courtesy of the unions.

2.Saruman and Sauron script (read Jackson and Warner).

3.Shelob script (read Crosby Textor).

4.Bilbo Baggins, trapped,tired and resigned (read John Key).

Sauron is happy, for now, and Saruman survives.


Where the hell is Frodo (and that bloody ring) when we need them?

by Tim Watkin on November 02, 2010
Tim Watkin

Tabitha, you make a good point about the timing and his record of fairness. I only have his word, but his first statement said he had already agreed to SAG conditions for NZ actors, so fair enough.

So while he was arguably a poor target, that still doesn't justify his outbursts and the damage they did, does it? A cool head and a more responsible use of his power could have kept the lid on and saved us millions (part of which, he presumably now pockets, indirectly). Yes, the law seemed to be on his side, but the CTU reckoned the law could have been challenged or re-interpreted. Why not talk about that? It's not as though the NZ actors' complaints were news to him. He knew they'd been bubbling along on other productions.

At what stage did the government get involved? I'm critical of Gerry Brownlee's hyped-up TV appearances, Key's 50/50 statements and the way they chose sides rather than opting to mediate. Bad choices, NZ Inc-wise. As Stuart says, lower key would have been preferable. But do you have some examples of some good ones?

Magoo, you ol' cynic. With new governments especially, I like to take them at their word unless there's good reason not to, and on the NZ Inc front, it seemed like something National might just believe in. It's not impossible for politicians to actually stick to a strategy, rather than simply use strategic words as a bumper sticker.

I can't think of any examples right now... it's late and I'm sick... so perhaps someone else could suggest a government and a slogan that actually went somewhere?




by stuart munro on November 03, 2010
stuart munro

I would suggest that PJ is not quite as good at treating with unions as he is at making movies, and that the MEAA threw an extra spanner in the works at the worst possible moment.

Standard practice if you have a bolshy & less than representative union is to meet quietly and informally with the rank and file, and try to find out what the grievances are prior to their being politicised. You have a barbeque or something.This allows you to deal with the actual issues, and if necessary cut the union reps out of the picture if they won't play ball.

Going public, even with as good a public character as Peter Jackson has earned, may escalate things, and is in any case irreversible. Large companies generally prefer negotiations out of the glare of media attention.

by Mr Magoo on November 03, 2010
Mr Magoo

I find it impossible to believe that cynicism is not the appropriate response to almost all political environment around the world. BUt then maybe I am just being cynical about that?

Get well soon!

And once you have, you probably still wont be able to.... ;)

by Tabitha on November 03, 2010

Tim, thanks for throwing Jackson a bone re the precarious timing etc. But it's just ironic when you say re PJ that he "could have saved us millions". This man has single handedly raked at least a billion into our economy. He got visibly stressed out. He owes us MORE?! Please, let's not get petty.

Yes I agree that the government shouldn't have to throw in massive extra incentives for the sake of it - and they were not originally necessary to clinch the production in NZ. But having examined all the facts from a very early time in this debacle, I place the blame for that squarely with the badly managed, malicious and misguided union action.

CTU's involvement should have been a welcome relief but instead polarised things further, especially Kelly's disdain for the workers who were fighting for their jobs. How dare they be happy with their terms and conditions?

Get well soon!

by Tim Watkin on November 03, 2010
Tim Watkin

Tabitha, if I write a good post one day, does that mean you can't criticise me for a bad one the next week? Or, if Sir Peter has done good things for the NZ economy a few years back, does that mean we can't criticise him for his response this time? (And let's not forget he's raked in roughly half a billion for himself, so this isn't altruism).

And it's interesting that you ask about whether he owes us more. From a business point of view he owes us nothing. You'd like to think that he has benefited from this country's scenery and talent and so he'd feel some sense of obligation, but the bottom line is that he doesn't owe us a thing. From a NZ Inc point of view, however, he should have been thinking of the national good, seeing his success as part of the nation's success, based on our scenery, talent, labour pool, tax incentives and laws, currency, political stability - the lot. One of my points is that if the government was serious about NZ Inc, it might have reminded him of that.

And I'm curious about the timing, so I'm interested that you say you've been watching this from early on... MEAA came to NZ and merged with Equity in 2006, right? Did actors start pushing for more back then, do you know? When did they start asking for more equivalence with overseas deals? Is it correct they wouldn't sit down with SPADA? When did the union first approach Sir Peter, when did the boycott idea arise and what happened in the interim? I'm still not clear on the order of events, which seems crucial. Can you help?

by Claire Browning on November 03, 2010
Claire Browning

I'm still not clear on the order of events, which seems crucial. Can you help?

And while you're at it Tabitha, are you free to tell us what your interest is in this? Is it just a passing casual one ... or maybe not?

by Tabitha on November 03, 2010


I joined Actors Equity in the early 80s. I remember a strike in about 1983 actually, which I was part of. I remember a colleague's sign reading "Ya pay peanuts... ya get monkeys." I thought we were well paid, but I was young and he was a career actor. Anyway, industrial action by actors dates back a long way in NZ - well, back to the primitive, fledgling, infantile production days anyway... maybe not so long ago after all.

I attended meetings about the merger with MEAA a few years back, but my heart wasn't in that. After researching the pros and cons I thought we were better off remaining autonomous. The industry here is generally pretty co-operative, responsive and respectful (in my experience). Around the same time I divaricated my skill base because I decided acting in this fishbowl of a country wasn't for me, unless mixed with other businesses / skills.

Unlike many thumb-twiddling obsevers and confused idealists adding their two cents from the sidelines, I do have an interest in this. Late September / October was a fraught and scary time where although wages were being paid, we had precious little to do. Actors were supposed to be coming in for fittings, paperwork sorting etc. But we were hamstrung with the boycott. It was a scary time and if we'd been employees, then hundreds of redundancies were on the cards. As contractors though I guess 3ft7 could afford to hedge their bets on a weekly basis.

An international actors boycott of The Hobbit was instigated by MEAA in June and implemented by FIA. No vote was ever taken on this action by NZ Actors Equity members in fact most of them didn't know about it. But it was done in their name. Why The Hobbit was singled out has never been clear. Except that MEAA would make a TON of money, with 15% commission on residuals if their demands for a collective agreement were met. In August MEAA sent the letter demanding to meet 3ft7 directors (NOT Peter Jackson, whatever the union actors said later), to confirm the collective bargaining agreement (illegal) for Hobbit actors. Their supposed leverage (blackmail) was the continued boycott. Jackson refused and publicly called them bullies.

I know that NZ Actors Equity and SPADA have not always seen eye to eye, but there has been an open offer by SPADA to meet and re-negotiate the Pink Book (guidelines for actors' terms and conditions), and that they have been left hanging repeatedly by Equity who just cannot seem to get their act together on just about any front. Including not being registered since 2007 until they hurriedly rushed through the paperwork on October 14 this year, under MEAA's name. SPADA left messages again in early October for Equity to call them about terms and conditions but heard nothing back until much, much later in the month. Equity went to ground and the boycott stayed in place. The workers were panicking, PJ was furious, Warners started talking to overseas studios, battle lines in NZ were drawn, the government got involved, Simon Whipp went on holiday. The boycott created an impasse.

Here's something to think about. Techos and actors MIGHT get paid the total same on this film.  But the techos may work for 100 weeks, and the actors for maybe three.

Hope this helps someone? Anyone?

cheers Tim



by Tabitha on November 03, 2010

stuart can i just add that there IS a "generalisable policy for film" in this country (if this even makes sense). But if it is rigidly applied even when we have to bid for projects and move with the times (currency fluctuations, increased competition etc.) then it's actually rather counter productive.

SPJ has dealt with unions for a looooooong time. It's PART of making movies. From what I've seen dating back to the Frighteners, he does it well.

When Simon Whipp demanded a collective bargaining agreement of 3ft7, was he actively ignorant of NZ law? Or was he just being a dick?

He politicised the Hobbit in Jackson's industry WELL before the issues became public (i.e., before you heard about it). The implication in film industries around the world was that Jackson treated actors unfairly. How incredibly unfair and damaging to besmirch someone like that within their own industry.

I'm sorry stuart... if you're serious that Jackson should have shouted them all an amicable barbecue to thank them for trying to destroy his reputation, well Whipp should have been there alright - but only as the sausage meat.

Sorry to write screeds like this.

By the way I am no longer in Jackson's employee and I am - and always have been - very free to have my own opinions. I've worked in plenty of other industries so I don't have blinkers on that film is the one industry to rule them all.

But I watched this situation unfold, and it stunk.

by JamiesJ on November 03, 2010

"MEAA came to NZ and merged with Equity in 2006, right? Did actors start pushing for more back then, do you know? When did they start asking for more equivalence with overseas deals? Is it correct they wouldn't sit down with SPADA? When did the union first approach Sir Peter, when did the boycott idea arise and what happened in the interim? I'm still not clear on the order of events, which seems crucial. Can you help?"

These are precisely the questions the media should have been asking right from the start. Along with: have Actor's Equity/MEAA been attempting (illegal) collective bargaining agreements with SPADA and other local productions, such as The Cult, This is Not My Life, Outrageous Fortune? Why have Actor's Equity refused to renegotiate the Pink Book for the last two years? Were they asking for something legally binding (ie illegal?) Or is it SPADA's fault or a combination of the two?

These are questions to be directed towards SPADA and the MEAA/Actor's Equity. Why on earth has the media failed to do that? And asked them to front up with evidence? Sure there must be some emails floating about?

Anyway, there are some things that are in the public realm about this saga that IS evidence:

Here is the very FIRST piece of contact made to Sir Peter Jackson OR 3'7 by the MEAA or AE - this is from the MEAA's own 'hobbit factsheet' on their website:

Hobbit factsheet:

17 August Letter:

This stuff was all covered on Public Address ages ago.,2769,

There's a fair bit of puff in that thread, but it's worth reading through, at least from there down to the bottom of page 39.

That thread also contains the MEAA letter, posted by Simon Bennett, sent to its members that effectively tries to disguise all this information with the 'we just asked for a meeting' line, which has been constantly repeated by NZ Actors who have clearly been fed misinformation.

They were NOT simply asking for a meeting with Peter Jackson. They were asking for

1. A collective bargaining agreement to be made with the MEAA (not Actor's Equity)

2. This bargaining agreement would cover ALL actors on the Hobbit (not just AE members), whether they wanted it or not.

3. That the boycott was already in effect and would remain until the Hobbit agreed to the collective bargain with the MEAA.

Actor's Equity, the MEAA and Peter Jackson have all confirmed that this was the FIRST communication sent.

Why is the media not following that up?


by Alec Morgan on November 03, 2010
Alec Morgan

I get a feeling Tabitha is tail gunning for the producers camp here. What many have squiggled around is the power imbalance between AE and the entertainment industry. I predict two things; there will probably be attempts to set up a “company union” in Wellington, and the last has not been heard of Actors Equity. I was involved in Auckland during the 80s on the periphery in the Whimp/Moriarty days and in the 90s as an employee of the NDU that AE was then affiliated to. A number of the same faces and attitudes seem to persist in SPADA. Film maybe a cultural product but is a commodity nonetheless, produced in a somewhat precarious atmosphere of intermittent underemployment. Except of course if you are working on a series with regular hours-hello, could you possibly be an employee?-no, no, yes. This industry needs to consider dropping the preciousness, old style small guilds, and unify under the auspices of a professional union like the EPMU or maybe UNITE.


by JamiesJ on November 03, 2010

"I get a feeling Tabitha is tail gunning for the producers camp here."

Guilt by association with no evidence then? Nice one. Maybe it would be a good idea to actually debate the facts she's stating instead?

by Alec Morgan on November 03, 2010
Alec Morgan

JJ, Tabitha’s use of “their” in reference to AE indicates a certain distancing, and a Pundit regular-Claire, has called her also. My identity and pro union views are clear, I am not about to get into who did what, when, after the multi thousands of internet posts re the “Hobbit” affair. It has been most interesting to observe the mobility of Lord Jackson supporters around the net and Facebook. The fervent hope from some that a ‘holy grail’ chronology of documents and emails will somehow resolve matters just will not suffice. Kiwi taxpayers were ultimately well played by PJ and Warners.

by Tabitha on November 03, 2010

You are "not about to get into who did what" Alec. What... you don't want to know about the facts? I guess not then...

I am not a point blank Jackson supporter. No way. I was criticising him a few months ago, about having way too many productions slowly grinding along in concept stage, and taking too long to finish the Hobbit script.

I have been indifferent to Equity since I left their ranks. Since I'm assuming you're not a member either, you would have to call them in the third person as well.

I just call this whole situation as I see it, as stacked up by a decent chronology of documents - you must hate that.

Luckily I am able to take my ideological blinkers off when the need arises, and to see the EPIC FAIL by the union and CTU.

Just in case you missed it, the matter HAS been resolved. You are right though in that I don't know why I'm still trying to explain the facts, in the face of such a banal retort!

by JamiesJ on November 03, 2010

Alec, who cares? Please debate the actual merits of what she's saying rather than smearing someone. Is your suggestion that because she support Peter Jackson her claims must inherently be false? Ridiculous.

"The fervent hope from some that a ‘holy grail’ chronology of documents and emails will somehow resolve matters just will not suffice."

What, you mean trying to get to the truth rather than jumping to conclusions and claiming it was all a conspiracy by Peter Jackson and the Studios to defraud the NZ taxpayer?

And while I'm at it, I have a couple more vital questions, the media should have asked:

Was the meeting at decision to start the boycott of the Hobbit by the FIA/MEAA/Simon Whipp actually attended by a NZ Actor's Equity delegate? Did the NZ Actor's Equity board actually vote in favour of that BEFORE the boycott was enforced? If so, why did they not seem to know it was a boycott? Or why did they claim that they never sought a collective bargaining agreement?

Or is it better not to ask for facts in case the get in the way of the over 'cause'?

by DeepRed on November 03, 2010

On a wider scale, has NZ industrial relations reached a point of mutually assured destruction? If so, then the Hobbit War could be thought of as our industrial Cuban Missile Crisis.

At best, the detente has evaporated.

by Mr Magoo on November 04, 2010
Mr Magoo

Actually Tim I have to bloody apologise. After reading these posts and having actually worked in the corporate world I now totally get what you were trying to saying.

NZ Inc:

- Horribly monolithic organisation run strictly from the top down when it is far too large to be efficiently run this way.

- Main focus is on the "office politics" of jockeying for position and defending against the attacks of others instead of being productive and helping out

- Massive amount of money spent on organisation wide, executive initiated initiatives that few at the bottom believe in and will ultimately fail

- Evil

Have I covered it? Because now that I step back and think about it the whole hobbit fiasco is EXACTLY the sort of thing that went on in every single corporate I ever worked for!

A revaluation. Hallelujah brother!

PS: You can call me a cynic, but have your six shooter ready. You better be able to prove I am off the mark else I will be giving you six chambers of reality.

by Mr Magoo on November 04, 2010
Mr Magoo

"A revaluation"

A revelation. Always check the spell checker...

by JamiesJ on November 04, 2010

Tim, it seems that some of the questions have been answered on actor's equities own website:

Watch the 'video newsletter', right at the top of the page. It answers all these questions:

have Actor's Equity/MEAA been attempting (illegal) collective bargaining agreements with SPADA and other local productions, such as The Cult, This is Not My Life, Outrageous Fortune?

Answer: Yes.

Why have Actor's Equity refused to renegotiate the Pink Book for the last two years?

It wasn't legally binding.

Were they asking for something legally binding (ie illegal?)

Apparently, yes - that's the reason why they refused to renegotiate the pink book.

by JamiesJ on November 04, 2010

"actor's equities"

Hmm... that's not quite right :D

by Tim Watkin on November 04, 2010
Tim Watkin

Boy, a lot of detail to absorb. Thanks to everyone for chipping in on this. It seems to me the pertinent statements (I can't call them facts because I haven't got other sources, but these are the bits that seem to bear repitition without being debunked) are:

  • The actors' claims for a "minimum contract" had been around for a couple of years and having such a thing would bring us in line with other English-speaking countries. Sir Peter knew of these claims.

(I'm not clear whether a minimum contract is in law the same as collective bargaining, and thereby possibly illegal. I say 'possibly' because...)

  • The union questioned the assumption that collective bargaining was illegal and hoped to negotiate its way around that. It had legal advice to back up its position.
  • SPADA was opposed to a minimum contract (presumably for cost reasons), threatening to re-cast entire TV programmes when actors raised the issue. But it had been willing to negotiate, and the union was refusing (this seems very odd as negotiating is what unions do. Were the conditions considered too strict? Was the MEAA just too confrontational or stupid? )
  • Sir Peter has a reputation for paying actors well.
  • The MEAA sent its letter re an interntional boycott to 3 Foot 7 Ltd on August 17. The international unions had voted at a "recent meeting" of the FIA. As JJ says, we don't know whether an Actors Equity member was at that meeting and how they voted, (perhaps an MEAA rep was there and voted on behalf of its NZ members?). Tabitha seems to say that int'l meeting was in June and that local actors didn't have a local vote. Crucially, the boycott vote preceded the union's first contact with Sir Peter/3 Foot 7.
  • 3 Foot 7 and the studios refused to negotiate, basing decison on their legal interpretation of the law.
  • We're not clear as to why the MEAA brought the issue to a head on this film, but presumably because they thought it was a big, juicy target.

Which says to me a) Sir Peter could understandably be peeved at being targeted, but he could have got over himself and had a chat, and b) the union got the cart (boycott) before the horse (talk) and so inflamed the situation. Neither were thinking of the NZ emotion around these films nor about NZ Inc, but about their own egos and bigger strategies. The taxpayer got caught in the middle and lost.

by DeepRed on November 04, 2010
@Mr Magoo: Cue promotional video... "NZ Inc. Racing to the bottom since 1975."
by Tabitha on November 04, 2010

I think that's a pretty decent and fair summation there Tim.

Just a couple of things I need to point out - Jackson (and many other producers and industry players) would have known of the actors' claims for minimum contracts, yes of course. It was on the cards as soon as MEAA came in - indubitably it was their raison d'etre. However it would have been unethical and unsustainable for Jackson to negotiate on behalf of an entire industry, with blanket standards for other production companies. But he was being forced into a corner to do just that. How could he? That was a lose - lose situation. Especially since he has always paid well (as you've pointed out). So why did the actors personalise it? Why didn't they at least target a production that was paying badly - that they could afford to walk away from, and make an example of? They didn't want to pick on the small guys? Well those are the people who really can't afford them...!

Also, how can SPADA re-cast TV shows or threaten to do so? They are not in the business of casting.

SPADA also can't enforce all producers to adhere to their guidelines which are for best / common practice. But the Equity has never given an example of a production that doesn't stick to the Pink Book, despite saying it is rampant in NZ, and being asked for details. I mean of course small theatre productions can't pay too well. Even some TV shows. Equity is closely involved with these, including committee members being producers themselves - yet to my knowledge they have not templated a minimum contract and used it themselves!

I am not going to bother to defend PJ for not being inclined to "chat" to these people, after the blackmail, demands, threats. They weren't even representing NZ actors (they only had 89 members last year - this year they've been strong-arming new drama graduates when they sign up with agents, which is common in Oz, so membership has grown exponentially).

But I can understand it.

by Tim Watkin on November 04, 2010
Tim Watkin

Thanks Tabitha. But why would Sir Peter have been negotiating on behalf of the industry? The FIA letter refers to the wider industry, but asks for negotiations specifically on contracts for The Hobbit. So he only had to talk about his film, didn't he?

Good point re SPADA. Perhaps AE was being lazy and meant 'some production companies who are SPADA members'. And interesting point re AE members. Given Ward-Leland's role, does the ATC subscribe to the Pink Book, for example?

And a colleague has just pointed out one thing. We'd agreed that the FIA voted for a boycott prior to its first letter to Sir Peter. But the letter says that:

“The Hobbit” intends to hire performers under non-union contracts"

So contracts had been offered and negotiations begun. Had any of those actors offered non-union contracts complained? Maybe that argument had already happened and then the international group stepped in? (I'm not looking for an excuse for the union, but that would be material, wouldn't it?)

by Frank Macskasy on November 05, 2010
Frank Macskasy

If ever mass hysteria gripped this country, it was no better demonstrated that the last few weeks, when an industrial dispute erupted between Peter Jackson and Actor's Equity. The reaction from every segment of New Zealand society was one of collective naked fury not seen since the Under Arm Incident of 1981 or as divisive as the Springbok Tour, in the same year.

A simple dispute between Employer and Union turned into a near-panic and events spiralled unbelievably out of control, taking all the main players by surprise. There were street marches; Utube videos of Union officials harassed by anonymous video-photographers; threats; counter-threats; abusive emails(again mostly anonymous); newspaper editorials; and Talkback radio and internet chatrooms that demanded blood and the sacrifice of First Born.

All over a couple of movies about hairy-footed fantasy characters.

Actors Equity, to it's credit realised that the ire of the Village Mob had been aroused; were screaming for retribution; and duly called off any and all industrial action. Mostly to no avail, as reason had taken leave of most New Zealanders, it seems.

Finally, our esteemed Prime Minister and Typical All-Round Nice Bloke, John Key, faced off against a high-powered gang of Hollywood executives from Warner Bros. He went into the meeting declaring beforehand that there would be “no bidding war” with the likes of Slovakia or Hungary to retain the movies.

He came out some hours later confirming that tax-payers would be paying $85 million to Warner Bros, and we would be changing our labour laws to comply with their wishes. The Mafia couldn't have asked for a better outcome.

But was on Earth caused such a nationwide, feverish hysteria from so many normally easy-going Kiwis? What sparked such an outrage that saw local actors threatened with violence and even death? Even Robyn Malcolm stated she would be selling her home – such was the naked hatred being expressed toward members of New Zealand's Actor's Equity.

To be clear, this mass hysteria has little to do with an industrial dispute.

It has little to do with the prospect of losing a $650 million dollar venture to Eastern Europe.

And to be brutally clear, most folk couldn't care tuppence about local actors and technicians losing their jobs in the process.

After all, New Zealanders have stood by quietly and meekly as company after company relocated their manufacturing base and call centres tro China, Australia, Fiji, India, and elsewhere. Certainly not one single New Zealanders marched in the streets when Fisher & Paykel moved their manufacturing to China or when Telstra Clear moved part of it's call centre to The Philippines; as did many other companies.

Since the late 1980s, tens of thousands of jobs have been lost overseas, and most of our manufacturing sector has followed suit. Even our farmland is now up for grabs (more on this in a moment).

So obviously, New Zealanders are not to fussed about the 'gutting' of our economy. It has been happening for over twenty years and mostly with practiced indifferance by The Kiwi Masses.

So what was it that stirred the blood of ordinary New Zealand men and women to boiling point?

The answer, I would suggest, lies in our sense of self; our national identity.

Quite simply – we don't have one.

Once upon a time, we took pride in our rugby team, the All Blacks. Players such as Colin Meads, Sid Going, Brian Lahore, Ian Kirkpatrick were the stuff of legends. We were a tiny nation, but our team of fifteen black-garbed heroes could venture forth and thrash teams from far more numerically-populated nations. Australia, Britain, South Africa, France – all fell before The Mighty Blacks.

Then, as rugby became commercialised and slightly less “heroic”; splintered into various other 'codes'; tickets became outrageously expensive; and the names became more South Pacific than South Island – we slowly ceased to identify ourselves with the game. We became more sophisticated and were tempted with other sporting distractions in which we could take a small measure of national pride.

Also once upon a time, we took pride in being a rural country that could out-produce any other agricultural and farming country on this planet. Our archetypal hero, Fred Dagg, was a simple character with common sense wisdom and good-natured, blokish, humour.

But we outgrew Fred Dagg; John Clark moved to Australia; and our farmers began to speak with American, Australian, and Chinese accents.

We were a nation left with not many heroes, except for randy doctors and nurses on “Shortland Street” and high-flying financiers such as Faye & Richwhite and Allan Hawkins. Except that Faye & Richwhite were eventually investigated by the Securities Commission for insider-trading; the NZ Railways they purchased was looted and our rail system fell apart through lack of maintenance; and Allan Hawkins ended up in jail. The doctors and nurses on “Shortland Street” carried on with their amourous activities.

Then almost overnight, a new hero burst upon the scene: Peter Jackson.

Jackson started off in 1987 with his Z Grade splattermovie, “Bad Taste”. He quickly ran out of money and required tax-payer bail-out to the tune of $235,000 from the New Zealand Film Commission.

The film achieved a small measure of cult-status and kick-started Jackson's career. His subsequent films were popular, employing unique and charming aspects of Kiwi culture and humour.

In 2001, Jackson's first installment of “The Lord of The Rings” was released and became an international sensation. The eventual-trilogy earned Jackson Hollywood accolades; millions of dollars; and more Oscar Awards than could be carried in Fred Dagg's old wheelbarrow.

Indeed, the entire country shared in the radiant glory. New Zealand was suddenly the centre of international attention, if not most of the Known Universe. To be a Kiwi was cool. Tourists flocked to our country, eager to see the mountains; the rivers; the forests; and Hobbits roaming freely. Aotearoa became Hobbiton.

The Mountain Troll stood guard in Wellington's civic square. A heroe's parade at the World Premiere of “Return of the King” wound it's way through Wellington's streets. Dragons adorned The Embassy and Readings Theatres. A giant arrow was clevelerly plunged into the side of a Courtney Place pub. And a giant statue of Gollum greeted visitors to Wellington's International Air Terminal.

We suddenly knew who we were; we were the mythical land of Middle Earth. We were the nation that produced a man who could complete three complex movies, back-to-back, reaping hundreds of millions in profit in the process.

It put New Zealand on the map and our national and personal pride was boundless.

When the trilogy won a combined total of seventeen Oscars, Billy Crystal was moved to say, at the 2004 Academy Award ceremonies; "It's now official. There is no one left in New Zealand to thank." .That was the point at which Kiwis experienced a collective orgasm.

As many of the protest-placards stated during the recent “Save The Hobbit” marches; “New Zealand IS Middle Earth”.

So when Actor's Equity began their industrial action at the end of September, they were not just taking on Peter Jackson. Nor were they taking on Warner Bros. No, Actor's Equity was “attacking” New Zealand's deepest, cultural psyche.

New Zealanders now identifed so closely with hobbits and Middle Earth that any suggestion that movie productions be moved offshore was akin to wounding our collective heart. No wonder we responded with such irrational anger and hatred; our very national identity was under threat and as any psychologist will tell you, assaulting a person's psyche can have far more dire consequences than simply biffing him one.

New Zealand was not about to lose something we identified so closely with. (Because we had nothing else left in which to express our national pride.) And certainly not through industrial action led by an Australian, through an Australian trade union – which in itself raised stark issues surrounding our rivalry with that country. Australia was (in)famous for attempting to steal our cultural icons and now it appeared that they were after 'Our Precious', The Hobbit.

Yes, it seems we are that insecure.

So when John Key bent over backwards to the Wide Boys from Warner Bros, he was prostituting this country because he had no alternative. Far better to “take one for the team” than an alternative that, conceivably, could have resulted in people actually being harmed or killed.

Yes, the hatred was that palpable.

For a brief moment in our history, we went collectively mad. We were Bilbo Baggins faced with the awful prospect of losing The Ring forever.

And like Bilbo, we just couldn't bear to part with The Precious. We were The Precious and without it, we were faced with an culteral emptiness.

We are indeed slaves to The One Ring.

by JamiesJ on November 05, 2010

Frank, facts rather than invective, thanks.

Tim, I also have pretty much the same take as your assessment also.

The idea that Jackson would have been negotiating on behalf of the country came from a Hollywood Reporter interview with Simon Whipp saying the Hobbit might pave the way for unionisation for other productions in the country. Personally, I feel that vote was blown a little out of proportion, as he couldn't really legally do that. But I guess SPADA/Jackson were (probably rightly) worried that success with the Hobbit would mean local production would be targeted in the same dodgy way by the MEAA, and naturally they were keen to avoid it.

About this:

"The union questioned the assumption that collective bargaining was illegal and hoped to negotiate its way around that. It had legal advice to back up its position."

This was a bit of a disengenuous position. It is only legal to have a legally binding collective agreement if the actors are classed as 'employees', rather than independent contractors. They, however, never once brought that fact up. Actor's in NZ have always been classed as independent contractors. There are various tax advantages to this, which is why actors do not seem to have ever challenged this status.

In fact, on The Nation interview, AE President Jennifer Ward Lealand said:

" Well let's talk about the law here. So the Commerce Act says you cannot collectively bargain, absolutely, and we've never asked for that. There are two provisions in the Act which say you can form a joint venture, or you can have a recommended contract, and that would be probably the way we would be going."

But at the same time, they have this international boycott, demanding a collective bargaining agreement.

She then goes on to say, when questioned about the boycott:

JENNIFER     We have never said there's a boycott, it is not in any of our information, and also I need to talk about the Australian thing. We are New Zealand Actors’ Equity, we are a fully autonomous branch of the MEAA which is an Australasian based union. We have an elected board, we have an elected committee, here is is for New Zealanders run by New Zealanders, and this whole anti Australian thing…

SEAN Then why has Simon Whip been here all week?

JENNIFER Because he's our national director, he travels all over Australasia.

SEAN Okay, he's the person saying this is boycotted.

JENNIFER     He's not saying it's boycotted.

And then people wonder why Peter Jackson wasn't keen to enter into good faith negotiations with them. I know I wouldn't if I was him,

by JamiesJ on November 05, 2010

Oh, and about this:

Good point re SPADA. Perhaps AE was being lazy and meant 'some production companies who are SPADA members'.

I don't think AE are being lazy at all. They are wording this stuff VERY carefully, in order to make it less clear about exactly how this player out.

This is why you have people like Robyn Malcom on TV saying things like: 'all we wanted was a nice up of tea meeting with Peter Jackson'. She genuinely believes that's all it was.

by JamiesJ on November 05, 2010

Oh, just heard Robyn's interview on National Radio. She did very well. Happy to be clean about it being a boycott, and not suggesting the 'we just wanted a cup of tea' line anymore.

by Frank Macskasy on November 05, 2010
Frank Macskasy

James, not invective but analysis of the psychology behind this entire affair.

It's interesting to not that whilst this debacle was happening, an industral dispute between Sealord and the Service & Food Workers Union was quietly and efficiently resolved.

Sealord was contemplating closing down their food processing plant in Nelson and moving offshore, literally, to sea-based processing ships.

Jobs were saved; a factory was kept open; Sealord's business requirements were maintained; and there was no hysteria surrounding the dispute.

Now contrast that to the Hobbit fiasco.

The big difference, as far as I can determine, is that the issues became emotive and irrational.

by JamiesJ on November 05, 2010

I'd imagine, for one thing, that the Service & Food Workers Union didn't insititute a legally dubious international strike action as their first negotiating platform, and then didn't go on National TV and start telling fibs about it though.

As for your other comments, about emotion getting out of control, fair cop. But there's a lot more to it than just 'LoTR National Pride', from people who are critical of the Union's actions, though certainly that did play a factor in the hysteria.

But let's not mix up one issue with the other. One is legitimate criticism, the other is just a bit of sillyness that Warner Bros took advantage of. I don't know what's terribly surprising or shocking about that though. If a union horrendously bungle (and there's no argument that what AE did) a labour negotiation than the company are going to come right back at you. That's the way it goes, and why workers have a right to feel aggrieved at a union who displays a lack of competence in something so vital.

Agree the CTU don't deserve to be lumped in with AE's bungling though. But that's the way the cookie crumbles in the court of public opinion. The CTU should have been more aware before they stepped in, even though what they did was decent and honourable. It just wasn't very helpful to them though.

by Frank Macskasy on November 05, 2010
Frank Macskasy

"I'd imagine, for one thing, that the Service & Food Workers Union didn't insititute a legally dubious international strike action as their first negotiating platform..."

That is not the case.  My understanding is that there was considerable behind-the-scenes activity and calls for negotiations before SAG announced the international action. So call it a "first strike action" seems to be re-writing history/?

"If a union horrendously bungle (and there's no argument that what AE did) ..."

It didn't seem to be very well handled.




by Tim Watkin on November 07, 2010
Tim Watkin

Frank, I agree with the heart of what you're saying, and indeed that was the heart of my initial post. The unions mis-read when they saw this as just another labour dispute. This wasn't like call centres and factories going offshore, the national identity aspect was what brought the media and public into the fight. ...You make an interesting point about the thousands of jobs lost over the years without a sniffle.

But I agree with JJ's latest repsonse. What we've done in this thread is try to get into some of the facts and details and there is more to it than that.

And I disagree that feeling tied to these films means we are insecure. All countries have idiosyncrasies that define them; we're no different.

I'm interested in your suggestion that there was "considerable behind-the-scenes activity" before the boycott. Got any evidence for that? It has seemed that the unions went early.

As you'll have seen in this thread, we've tried to cobble together something of a timeline and the crucial bit of timing for me remains where it all began and who did the escalating.


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