It may be small but New Zealand is one of the world's most popular filming locations. James Cameron has finished shooting the action sci-fi Avatar for Twentieth Century Fox in the territory, while Guillermo Del Toro is set to spend the next four years in New Zealand shooting two Hobbit films back-to-back for New Line and MGM. He will be working with executive producer Peter Jackson and his Wingnut and Weta production teams.

Indeed from the seeds of the old government-owned National Film Unit, and the establishment of the Weta brand 15 years ago by Jackson and his cohorts, New Zealand has become a hub of sophisticated post-production facilities, complementing the country's breath-taking locations. What is more, New Zealand's film-makers are continuing to produce distinctive, often visionary, films.

Jackson is in post with The Lovely Bones for DreamWorks, Paramount and Film4, utilising several of the facilities in his empire, while Whale Rider director Niki Caro is winding up principal photography on period film The Vintner's Luck, which has shot in New Zealand and France.

First-timers Taika Waititi (Eagle Vs Shark) and Jonathan King (Black Sheep) made the most popular home-grown films of 2007.

Good word-of-mouth precedes three upcoming local debuts: Armagan Ballantyne's New Zealand-Germany co-production The Strength Of Water, Sima Urale's multicultural family drama Apron Strings and Paul Murphy's bittersweet comedy Second Hand Wedding. All are being sold at Cannes by local sales agent NZ Film.

"Debuts remain important but (New Zealand) is now making bigger upscale projects with complex financial arrangements and more elements to offer the international market," says Kathleen Drumm, head of NZ Film. Vintner's and also Toa Fraser's upcoming Dean Spanley fit this description.

But New Zealand's experienced producers, including Tim Sanders, whose credits include Whale Rider, and Richard Fletcher, who made The Strength Of Water, remain frustrated in their efforts to raise budgets of more than $7.9m (nz$10m). They are also nervous: their Australian counterparts can now claim back 40% of film-making costs, and this could hit New Zealand's ability to compete as an international co-producer.

"Overseas producers will look to form partnerships with Australia, not us, and people like me will look to put together some Kiwi-Aussie co-productions, which could see activity here decrease," Sanders fears.

However, it is understood the New Zealand government is considering the introduction of financial incentives similar to those that exist in Australia. "We want to follow Australia but remove the problems by making it a grant not an offset," says Fletcher, who is also president of the New Zealand producers' association (Australian producers only access the full 40% rebate on costs spent if the production company applying does not have existing tax debt from their other activities).

At present, New Zealand film-makers rely heavily on the New Zealand Film Commission (Nzfc) for financing. The Nzfc has an annual budget of approximately $19.7m (nz$25m) and is headed by Ruth Harley, with Marilyn Milgrom as development executive.


Dean Spanley

Dir: Toa Fraser

The cast is familiar - Peter O'Toole, Jeremy Northam, Sam Neill and Bryan Brown - but not the tone of this UK-New Zealand co-production. At first glance, this father-and-son story set in Edwardian England looks like a strait-laced costume drama but it is poignant, even wacky, with an emotional heart. The script is by Rob Roy writer Alan Sharp, and director Toa Fraser earned his stripes on No 2, an audience prize-winner at Sundance two years ago. Alliance Atlantis has snapped up Canadian rights and the fledgling Paramount/Transmission joint venture has snagged distribution duties in Australia and New Zealand.

Int'l sales: NZ Film, (64) 4 382 7682

Under The Mountain

Dir: Jonathan King

King's delightfully demented debut Black Sheep shook the horror genre and he is following it up with teen fantasy Under The Mountain. The much-admired Weta Workshop will create the creatures haunting this adaptation of the Maurice Gee novel. Capitol Films is handling international sales, except Australia and New Zealand, through the ThinkFilm label. The cast is yet to be announced.

Int'l sales: ThinkFilm International, (Australia/New Zealand rights are held by NZ Film)

The Vintner's Luck

Dir: Niki Caro

Elizabeth Knox's period novel tells of the life-long relationship between the wine-maker Sobran and an angel, and the book was popular among international reviewers. Whale Rider director Niki Caro - now at the tail-end of filming - is hoping audiences will have the same reaction. Belgian actor Jeremie Renier is Sobran and Whale Rider star Keisha Castle-Hughes has scored her first adult role as his wife. US script guru Joan Scheckel co-wrote the New Zealand-France co-production with Caro. Filming started in the vineyards of New Zealand before moving to France. The producers are Laurie Parker and Robin Laing of local outfit Ascension Film and Pascal Judelewicz and Ludi Boeken of Kortex Cinema in France.

Int'l sales: NZ Film, (64) 4 382 7682

The Volcano

Dir: Taiki Waititi

At script stage, this new project from comedian-writer-director Waititi is a follow-up to his Oscar-nominated short drama Two Cars, One Night. It tells of a 12-year-old who has to reconcile his fantasy father with the impenetrable, violent man who returns home after seven years. Waititi's feature debut, Eagle Vs Shark, underperformed internationally but was a hit in New Zealand.

Int'l sales: NZ Film, (64) 4 382 7682.