The New Zealand Government has announced that producers who choose New Zealand as a location for their big budget projects will be handed back 12.5% of their production expenditure.

Those spending $30m (NZ$50m) locally will automatically qualify for the grant, but if the local expenditure is $9m-$30m (NZ$15m-NZ$50m) it must represent at least 70% of the total production budget.

"This grant scheme is an encouragement to attract and maintain the net economic benefits of hosting and producing major film and television projects in New Zealand," said the Minister for Economic Development Jim Anderton.

He has applied the scheme to features, including those released direct to video, telemovies, television drama series and mini-series. Local production is eligible but few have budgets in this league.

"While expenditure on the grants will vary from year to year, in the next financial year $23.3m (NZ$40m) could be available, based on large-scale film and television productions already considering filming here next year. In total these projects could invest nearly $175m (NZ$300m) in New Zealand."

Anderton was careful to point out that although the new scheme is focussed on large budget production, among the beneficial "spill over" will be continuity of work and skill development for local screen producers.

The rules surrounding the grants scheme and its method of administration will be developed over the next two months. One of the productions believed to be seriously considering New Zealand is The Lion, The Witch And The Wardrobe. The most recent big-budget offshore picture was The Last Samurai.

The form of the incentive is an exact copy of what was introduced into Australia nearly two years ago.

Meanwhile, Australian director Baz Luhrmann and Dino De Laurentiis, the producer behind Luhrmann's next film, Alexander The Great, are in Australia visiting locations and trying to persuade the Australian Government to provide military support for the film. Luhrmann told one newspaper that without this assistance the film would probably be shot in China.

Alexander The Great was to have been shot in Morocco but this plan was cancelled after security became a concern. The next Star Wars film started shooting at Fox Studios Australia in Sydney yesterday.