Fantasy fans can thank the New Zealand Government for its part in bringing to life the new Lord of Rings spinoff hitting Amazon Prime next week.

The first season of The Rings of Power was shot in New Zealand and partly funded by some generous film subsidies to Amazon Studios, which is owned by one of the world's richest men, Jeff Bezos.

NZ Herald investigative reporter Matt Nippert has spent years looking into these subsidies and tells the Front Page podcast the sums are eye-watering.

"If they come here and spend enough money, they can get 20 per cent of what they spend here back with a cheque," says Nippert.

"Sometimes it's a little bit less than 20 per cent, if, for example, they're just doing visual effects and post-production. And in certain special cases, if they argue there's a significant economic benefit to New Zealand, that gets bumped to 25 per cent."

So what exactly does this equate to in monetary terms for a show like The Rings of Power?

"You just need to do the basic maths to see the extent," says Nippert.

"Lord of the Rings has a reported budget each season of $600 million. If you take [25] per cent of that, you're looking at about $150 million... They've only asked for about $30 million so far of the $151m budget spent in New Zealand, so clearly there's a bit more money to be flowing in."

Nippert says the numbers are even more staggering when you look at a film franchise like Avatar.

"That's just on a whole other level. It's another mega production getting towards the end. We've paid out $140m to date with a $700m budget. And clearly, there's still lots of cash to flow under the bridge."

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These aren't numbers to be scoffed at.

"If you look at $150m, that's the equivalent to the entirety of NZ On Air, which funds RNZ and a big chunk of journalism. It's also three times more than the Creative New Zealand budget, which funds all our dance, literature and theatre. It appears to be significantly out of whack."

Nippert says the major incentive in paying this money lies in the number of jobs created by having these films made here.

A good local example of this would be billionaire filmmaker Peter Jackson, who has long been a beneficiary of the Government's various film subsidies.

"When this scheme was put in place, there was real concern that Jackson would leave. There were hundreds if not thousands of people being employed by him at the time. And to encourage him to stay and build an industry here, we did agree to pay him."

But that approach isn't being afforded to everyone. The release of the new Lord of the Rings film coincides with calls from the video game industry for more support from the Government.

Dean Hall, founder and chief executive of Rocketwerkz - creator of the global hit game Icarus - recently told the Herald he is scoping out locations for a studio in Australia due to the Government's failure to match tax breaks for game developers.

Nippert says that if you accept the arguments of economic return for the film industry, then surely they should also apply to something like video games.

Rocketwerkz CEO Dean Hall. Photo / Michael Craig

"It requires you to have a very exceptionalist view of the film industry to just give it to them," says Nippert.

"It's really that the film industry has almost become too big to fail."

The problem in cancelling these subsidies for the film industry is that it's difficult to find the political will to do it. Any party that dares to remove these subsidies could cost thousands of local jobs.

"We had a group leading marches in the streets about a decade ago over an employment issue, so you can mobilise a lot of public attention around this, which makes it politically difficult."

Even if there is a strong argument to be made for moving the money elsewhere and into different industries, the transitional period could be too difficult for many politicians to stomach.

The Front Page is a daily news podcast from the New Zealand Herald, available to listen to every weekday from 5am.

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