Price New Zealand paid for film a bit too precious

Warner Bros's negotiations with the government of John Key led to the Land of the Long White Cloud keeping the two Hobbit films, but it's the little people who look likely to lose out.

Acting rates and working conditions in filming The Hobbit in New Zealand have been a hot topic that scorched even the local currency.

The state of the All Blacks rugby team briefly took second place to another issue last week: is the prime minister John Key the true master of Middle Earth, or is he being controlled by a sinister foreign power bent on extracting as much as possible from its host?

The great battle to keep filming The Hobbit in New Zealand revolved around just a few questions. What is the going rate for playing a goblin, a hobbit or a dwarf? Will you be paid hourly or under contract? And what about daily rates?

The acting rates and working conditions of Middle Earth have been the cause of much ruckus in this country of just more than 4 million people.

They have moved the government to change industrial law, sparked a run on the New Zealand dollar and prompted the treasury to pay millions of dollars of sweeteners to a powerful foreign presence - all to ensure the two Hobbit films stay in the Shaky Isles.

At stake for the New Zealand government was retaining the US$500 million (Dh1.83 billion) production, reportedly the most expensive film project ever. Keeping it there would save thousands of local jobs.

Mr Key described the two days of talks with Warner Bros executives as "hardball" but if anything, the New Zealand defence gave away too many unanswered points.

Under the deal, tax breaks on the Hobbit movies, already worth up to $60m for the studio, would be increased by $15m. On top of that, New Zealand would also contribute $10m towards Warner's marketing costs. The New Zealand parliament then moved to introduce legislation "clarifying" laws covering workers in the film industry. What concessions did the New Zealanders wrench from Warner Bros in return? A vague assertion the studio would help market New Zealand as a tourist destination.

The fracas started when the actors union, NZ Equity, demanded The Hobbit's producer and director, Sir Peter Jackson, allow it to negotiate minimum standards for actors, which he refused.

The argument was about whether workers on such films were employees of the production company, which entitles them to minimum benefits, or contractors.

At the height of the dispute, Jackson - who turned New Zealand into Middle Earth for The Lord of the Rings - said the suggestion that actors might have to be employed "would undermine Warner Bros's confidence in New Zealand as a stable employment environment".

The Americans, he said, were "very concerned about the security of their $500m investment".

In other words, goblins must be sole traders, paid the going rate and forbidden the right to strike. Helen Kelly, the president of the NZ Council of Trade Unions, berated the government for selling out "fundamental rights" of workers.

The labour law change was "opportunistic" and "unnecessary", Ms Kelly said, as there was already a clear distinction between an independent contractor and an employee under the current law.

But it was the threat, not people's rights, that mattered. When Jackson, a living icon in New Zealand, reported his masters' feelings, Middle Earth seethed.

The New Zealand dollar dropped rapidly, thousands of actors, crew and film people took to the streets and parliament passed new employment laws with urgency.

And the Americans? They never said a word. Like the true masters of their new realm, they just made their feelings known.

Since The Hobbit was first conceived, the NZ dollar has appreciated from 50 US cents to 75 cents. This was probably not about actors' rights at all. Warner Bros was baulking at a blowout in costs and sought to gain compensation.

So when The Hobbit finally does appear at a screen near you, spare a thought for all those marauding goblins, squabbling dwarves and treasure-seeking hobbits.

Their currency might be in better shape now, but they truly are the little people.