Parliament has passed a labour law change the Government says was an essential part of the deal to ensure The Hobbit movies stayed in New Zealand.
With Parliament sitting under urgency, the Employment Relations Act was amended on a vote of 66 to 50 amid Labour Party accusations that the Government had capitulated to Warner Bros.
The agreement that has kept the $670 million production in New Zealand was reached after two days of difficult negotiations between senior ministers and Warner Bros executives earlier this week.
The Government agreed to give the studio an additional $20m tax break and change the law so there would be no possibility that contract workers could go to court and claim employee rights.
Economic Development Minister Gerry Brownlee told Parliament today the labour law issue wouldn't have arisen if the Australian Media, Entertainment and Arts Alliance hadn't put an international ban on the movies in an attempt to force a collective contract.
That was rescinded, but Warner Bros was nervous about its investment and the potential for industrial strife during production.
"No one is going to commit about $700 million to an investment and secure people to offer their talents for that endeavour without knowing those talents would be there at the end as they were at the start," Mr Brownlee said.
"There is nothing in this bill that takes away rights. All it does is codify the arrangements under which their engagement is contracted."
Labour Minister Kate Wilkinson said the Employment Relations (Film Production Work) Amendment Bill clarified what was already widespread industry practice.
"We were not prepared to see thousands of Kiwi jobs disappear and we were not prepared to see the hard work of the many talented New Zealanders who built our film industry from scratch put at risk," she said.
Labour MP Charles Chauvel said it was bad law passed under a defective process.
"What is the Government going to do next -- give in to any multi-national that asks for a labour standard to be diluted in return for some form of investment?" he said.
"This is a government which, in the words of the Financial Times today, has reduced New Zealand to client status of an American film studio."
His colleague David Parker said the issue had always been about money.
"This change of law wasn't even central to what Warner Bros wanted," he said.
"They wanted more money. This was convenient to National so it could stick it to the unions and try to link the Labour Party with that."
National's Tau Henare said Labour didn't support the bill because it was looking after its union mates.
"Talk about overseas influence -- I've never seen the likes of it before, an Australian union waltzes in and tells workers in this country what to do," he said.
"Warner Bros were about to bugger off -- and a billion dollars would have gone."
