Film director Roger Donaldson has been made an Officer of the New Zealand Order of Merit.

The Smash Palace and The World's Fastest Indian director says it is an acknowledgement for the local industry.

"What I really hope it is, is that New Zealand will continue to make great movies that it has been making, that young people will be inspired to want to be a part of the industry, that old folk like myself carry on and continue to make those films that are still making a mark around the world," he told Newshub.

Australian-born Donaldson began his career with Sleeping Dogs in 1977, which starred Sam Neil. 1982's Smash Palace got Hollywood's attention, and he soon found himself working with the likes of Tom Cruise, Kevin Costner, Mel Gibson and Anthony Hopkins.

His 2005 flick The World's Fastest Indian was for a time the highest-grossing local film at the NZ box office.

Donaldson, who moved here in 1965, says the arts are the heart and soul of our country.

"I think in the time I've been making movies, New Zealand's cultural identity has really come of age. And people are not embarrassed to hear their own accents, see themselves up there on the screen or hear themselves on the radio or whatever.

"And I think that's a big, big milestone in the development of New Zealand's stronger identity that's developed recently."

His most recent work was a documentary on Kiwi car racing legend Bruce McLaren.

Newshub.