Red Alert

Today the house must not win

Posted by on February 20th, 2013

New Zealand is a small, remote country with an unfortunate reliance on imported capital to maintain our standard of living. A crucial insurance for the economy is New Zealanders’ hard-earned reputation for having the lowest level of government corruption in the world.

Or at least that’s something we had.

I write this post with the heaviest of hearts because I know how completely National has jeopardised the economy. I know how foreign investors will be frightened by the truth. Their reaction could see more hardworking and innocent Kiwis turfed on the unemployment scrapheap.

Ultimately, though, there is an overwhelming public interest in having on record just how low Prime Minister John Key and his factotum Steven Joyce have sunk in their bid to trade our country’s laws for a casino’s cash.

Yesterday the Deputy Auditor-General released her report into the tender process for the SkyCity convention centre. At 71 pages it is among the longest and most damning auditor’s reports I have seen. John Armstrong, writing in the New Zealand Herald, assessed the tender as “verging on banana republic kind of stuff without the bananas.” Armstrong was too polite.

Labour leader David Shearer summed the report up more completely: “Kiwis know [Key] was donkey deep in this entire process. The deal with SkyCity was his idea. He knew exactly what was going on and was pulling the strings behind the scenes.”

I have followed the convention centre tender since it first came to public light in 2010 – months after John Key had a cozy dinner with the casino company’s board and (in the PM’s own words) “discussed a possible National Convention Centre and they raised issues relating to the Gambling Act 2003”.

As time has passed I have become more and more outraged by what was transparently a stacked process seemingly designed to ensure SkyCity was the only tenderer left standing at the end.

All throughout the National Government have obfuscated, played cat-and-mouse games with the Opposition and the media, and denied multiple Official Information Act requests on the most specious of grounds.

Not only did ministers refuse to answer more than 100 of my parliamentary questions on the SkyCity deal – but they even took to using the SkyCity deal as a supposed reason to refuse answering dozens of questions which were quite unrelated to the casino!

The Commerce Select Committee (which I am a member of) even had to take the most extraordinary step of recalling Ministry of Economic Development/MoBIE officials to a second testimony session, following their failure to answer legitimate questions as part of the committee’s 2011/12 financial review.

As the years passed and the stench of the rotten tender grew overpowering, the sole explanation Key and Joyce offered for their preference for SkyCity was that taxpayers wouldn’t foot the bill for the conference centre. But that was an outright lie – $2.1 million of your dollars were diverted from the Christchurch earthquake recovery effort and other economic development programmes to support the convention centre design!

Finally, when the Deputy Auditor-General prudently announced a probe into the whole sordid affair, Steven Joyce vowed to push on in contempt of her. In my time in Parliament I have never seen anything like it.

But now the auditor has published her report. Her findings are damning and they back up what I have been saying and what my Labour colleagues have been saying since 2010. It is beyond comprehension that Steven Joyce did not resign from the ministry immediately after receiving the report.

The Deputy Auditor-General’s findings include (and I quote):

  1. We do not consider that the evaluation process was transparent or even-handed (p5).
  2. SkyCity was treated very differently from the other parties that responded [to the tender] and the evaluation process effectively moved into a different phase with one party… the steps that were taken were not consistent with good practice principles of transparency and fairness (p5).
  3. The Prime Minister/Minister of Tourism… annotated the [tender] briefing paper by hand, stating that “we should close off the SkyCity angle first” (p15).
  4. It was well known among officials that SkyCity had met with various senior Minister in the previous months. In our view, there was an obvious risk that SkyCity would have a better understanding of the Government’s thoughts than other participants (p45).
  5. There were a number of flaws with the way the evaluation process unfolded during 2010 (p50).
  6. Given the nature of the responses, it is likely that the SkyCity proposal was always going to be the most attractive (p51).

So what are the broad consequences for New Zealand?

Has the opaque and unfair SkyCity deal been scrapped? No.

Instead National has thumbed its nose at the auditor’s office and is about to restart the negotiations. They have to finalise pesky details such as how anyone will receive the television news once a hulking great pokie palace is plonked where our state broadcaster has some of its studios.

Has the Government promised not to change the law to flood central Auckland with very low-taxed pokies, while taking money out of high-taxed pub pokies which fund kids’ learn to swim programmes and quit gambling programmes?

It’s a no to that too.

As my Labour colleague Ruth Dyson succinctly put it “The convention centre will not be ‘free’. The social cost for New Zealanders and their families battling problem gambling will be significant.”

So National seem quite happy to plough along with their trade in our laws, whatever the consequences. Well Labour will fight them every step of the way. I can only hope that the government’s support partners in the Māori and United Future parties will do the right thing and join us.

Ultimately, though, this is not only about one shady deal – although one shady deal is clearly one too many.

This speaks to the whole world about what sort of country New Zealand is in our collective soul. It speaks to the truth about whether we have a clean government which stands up and stops corruption wherever its finds it. Or whether we don’t.

And it speaks to our longstanding core values of egalitarianism and equality. Labour MPs face the human casualties of the National government’s economic mismanagement in our electorate offices every week. We know the despair felt by ordinary, honest kiwis who can plainly see that John Key’s ‘brighter future’ means one law for them and sweet deals for his mates at the big end of town.

The casino deal is a total disgrace. Clearly John Key and Steven Joyce don’t care.

So, in light of the Deputy Auditor-General’s report, I am publicly calling on SkyCity to formally withdraw their current tender. That should trigger the entire process to restart from the beginning, so it can be run fairly and transparently.

I look forward to SkyCity’s quick, positive and public response.

Extra: David Shearer, Grant Robertson, David Parker and Ruth Dyson all gave excellent speeches on the convention centre deal in Parliament today. Well worth a watch!


26 Responses to “Today the house must not win”

  1. PlanetOrphan says:

    Classic delusional behaviour from DunnoKeyo.
    I doubt he’d even care if his own son had a gambling problem, unless he was using daddys’ cashflow card of course.

    Playing the Pokies … DunnoKeyos’ “Brighter Future” in action.

  2. SJW says:

    This issue shows that those in this government do not hold the interests of New Zealanders at heart. Not at all. Utterly disgusting.

  3. Party Vote Green says:

    Fair enough. It stinks.

    BUT is it enough to call for the re-opening of tenders? Despite the certainty that Nat government will ignore such a call (at best), even if it wasn’t, what’s to stop them simply re-opening the tender on the same basis that Sky City won it?

    That is, what’s to stop the gummint commissioning a casino cum gambling centre?

  4. phillip ure says:

    having done commentaries on q-time under two previous speakers..

    ..i feel qualified to make the observation..

    ..that i thought the ‘news’ from questiontime today is how biased the new speaker is for the govt..

    ..and to a jaw-dropping degree..

    ..and how that bodes ill for democracy/parliament in the short/near term..

    ..and if not sorted to be more ‘fair’..

    ..it risks driving q-time onto a low-level anarchy..

    ..and making parliament dysfunctional..

    phillip ure..

  5. David Cunliffe says:

    @Phillip Ure. Indeed QT was a shambles today. Ironically the Govt of the day always does better when the House is calm. A neutral and broad based Speaker calms the House. That did not happen today and I fear worse will come if a change in style does not occur.

  6. Matt says:

    @David – I have to take umbrage with that first sentence. That position is so wrong/neo-liberal. Our standard of living will ALWAYS be determined by those in charge… Sovereign in all.

  7. jennifer says:

    David, I wouldn’t hold my breath waiting if I were you. This is not about Sky City. They are in business to make dough, and are doing precisely what any company in their position would do. They have actually played a blinder, now having Key ‘by the balls’ in the negotiations. He and his ‘clever’ radio jock mate Joyce have been taken for a ride, and these fools don’t seem to know it. Mind you, Bernie Madoff kept his ‘game face’ long after the rort was up.

  8. Jack Ramaka says:

    Why were the others tenderers offered 300 pokie machines to go with the deal, obviously the playing field was tilted towards Sky City. Shon Key Business.

    Reminds me of the Kinloch Land Deal at Taupo when Holyoake and the Rich Listers Gibbs Family bought Maori Land on the Lake Taupo Foreshore.

    Corruption is live and well in NZ always has been it just depends on who the beneficaries are. Also most people do not have the financial resources of legal skills to fight the fraud which has often been perpetuated by State organisations or people associated with State organisations.

  9. bbfloyd says:

    @matt..your statement is a historical one.. unfortunately, the longer this gang stays in power, the less likely it will be that we will have the right to economic self determination…And it is fact that our banking system would be wholly owned by overseas banks if it wasn’t for Kiwibank(soon to be flogged off to whichever multinational offers johnny & co the best kickback..

    Our largest construction company(fletchers) is approximately80% owned by multinational corporations…

    If not for Pharmac, every time you had to take a pill for any ailment you choose to name would be adding to the profits of multinational drug companies…

    Davids statement is, unfortunately, quite true.. You have a right to be angry about that, but not to avoid the reality…

    @Jennifer.. I can see where you are coming from, and I sympathise with your position, but I think you aren’t giving little johnny and (mr fixit)joice enough credit for brains…

    They know exactly what they are giving away, and what it will do to the most vulnerable sectors of society….

    They just don’t give a damn!!!It’s about THEM, not us….
    Their future prosperity, and security once they have finished the job they were picked for…Cutting away all the “fat” in the economy that the last, utterly irresponsible government had put in place on behalf of those “undeserving” workers, and families who, after all, are just sponging off the state..

    Why else would they have discovered the need to launch yet another attack on beneficiaries…At this rate, the families around those “bludgers” will be afraid to even visit them in case they are targeted as co-conspirators…Obviously a necessary step to protect us from the destitution they will wreak on the economy…
    (sarc. last paragraph)

  10. jennifer says:

    @ bbfloyd, I’m not so sure the ‘bene-bashing’ on-cue works for them much any more? I reckon the public smell a rat, a smiling rat in an Armani suit wearing a Cartier watch.

  11. Te Reo Putake says:

    Interesting question being raised over at The Standard; does Dunnokeyo’s repeated insistence that SkyCity and TVNZ had done a deal for the land needed for the convention centre, when no such deal has even been considered, constitute lying to Parliament?

    http://thestandard.org.nz/key-lied-to-parliament/

  12. David Cunliffe says:

    @matt: opening comment was a statement of the current status quo and certainly not the world as we would wish it to be. Much of Labour ‘s economic programme is aimed at making NZ much less dependent on foreign capital over time: hence the package of CGT, universal Kiwisaver, strengthening Kiwibank etc that I was proud to help drive when Finance Spokepserson.

    @Jennifer : you are right to some extent- the key failure (pun intended) here is one of regulation and bad process by the current government. But Sky City does seek to maintain a reputation as a good corporate citizen, so cannot be blind to the fallout from this matter.

    @TRP: excellent point, picked up in QT today by Grant Robertson. Worth watching the video.

  13. Mike says:

    Wait a moment! Wasn’t National the party that trumpeted about honesty, transparency and open government a few years ago? “Get rid of this corrupt Labour government” they blustered! I have twice e-mailed freedomhouse.org (the so-called great corruption and freedom watcher of the world) and suggested that they should look into this government’s activities and tell me if their political rating (1 – the best) is still appropriate. They can’t even bother to acknowledge receipt of my e-mail let alone reply to it. But I guess when you can smile a lot and say nice things to those cheesy NZ media personalities – who needs to tell the truth? You won’t be asked to prove it.

  14. SJW says:

    “Wasn’t National the party that trumpeted about honesty, transparency and open government a few years ago? ” ~Mike,

    Yes, this is what I was recalling too,including Mr Key’s statements about expecting accountability from his ministers.

    Might I suggest to the opposition parties a repetitive approach of reminding both the house and the NZ public-repetitively-of this particular-repetitively- broken promise (one of countless examples of repetitively broken promises)?

    I believe this would go a long way to putting a stop to the infernal credulity that a certain number of New Zealanders are displaying toward this sham-of-a-government-more-accurately-referred-to-as-a-circus.

    I believe that this message can’t be …er…repeated…too many times. :)

  15. phillip ure says:

    “.. I have twice e-mailed freedomhouse.org (the so-called great corruption and freedom watcher of the world)..”

    while at uni i did an audit of those clowns…

    ..and concluded they were puppets/defenders for the status quo..

    ..and just a good little earner for those involved..

    ..phillip ure..

  16. the pigman says:

    Labour caucus – Key’s retractions over the issue of SkyCity having approached TVNZ are now MSM news. It would be great if you could connect the dots between Rt. Shon. Key’s depth of knowledge of the SkyCity plans with the depth of his involvement in the deal.

  17. Jack Ramaka says:

    Transparency has never been one of the key attributes of the Tory Governments the motto of “greed is good”, always comes to the fore.

    These people get into Government to feather their own nests and those of their crony elite friends, the Maori have witnessed this for a long time with the appropriation of their lands by the State. Without having the financial resources or the legal skills to fight the State funded legal system who work for the benfit of the Tories and the NZ Business Community.

    The Sale of our State Energy Assets will be another win for Sir John Key and the BRT, this will generate a windfall for the Merchant Banking Community, New Zealanders will wake up one day and realise what our Government Ministers have been up to.

    I still do not understand why we sold our State Banks, BNZ and the Rural Bank, it does not make economic sense as well managed banks are cash cows. State Energy Assets are also cash cows if managed properly, obviously Solid Energy has gone off the rails and has suffered from poor Governance.

    With NZ Inc’s debt ballooning to $60 Billion one should be looking at the NACT’s Party’s governance especially tax cuts to the wealthy.

  18. Douglas Haig says:

    The Original Casino Premises license process was corrupt due to the Chairman Jock Irvine having a conflict of interest over his knowledge that the land swap between Brierley and Auckland City Council was a blatant fraud due to the fact the Hobson Street land was/is statute barred in height to 45 metres. Sky Tower [Casino] does not hold a planning or construction compliance certificate for their non compliant Sky Tower as per the statutory Mount Eden E10 view-shaft regulations,nor does Sky Tower comply with the rules and building regulations set down by the then Auckland City Council now Auckland Council.

  19. Phil says:

    I think JK just ‘forgot’ that he had been speaking to SKY when he thought it was TVNZ. People who spin a line often end up making it up and inevitably get found out, hopefully with an interested MSM.

  20. Bobby says:

    The siftiness of this whole deal has been talked about everywhere, and with good reason, but it’s probably time for a few of the left to get down off their high horse over the goings-on in Govt these days.

    On the matter of the free-ness of the convention centre Ruth Dyson has an astonishingly short memory. Labour themselves allowed Sky City to add another 230-odd machines and a dozen gaming tables in 2001 to help them pay for the Federal St convention centre – a ratio of tables to investment many times higher than what has happen in the recent shonky deal. What was the “social cost” consideration given then?

    On the matter of alleged corruption the Govt is not doing itself any favours at all but, similarly, Labour is the kettle calling the pot black. Astonishing handling of events such as the Bill Liu citizenship case leave many unanswered questions and, viewing just the publicly available details, is a worse case of direct corruption by people in a position of power. The numbers being talked about may be much smaller but Labour is on a hiding to nothing if it thinks it has much credibility in terms of keeping a clean nose in who it deals with and what undisclosed influence its supporters such as CTU have over both policy and strategy in the party.

    Key and National are becoming professional foot shooters of the highest order. If Labour wants to capitalise on this a fresh strategy and hard look at its own house is sorely needed. The ongoing negativity endears the party to no-one outside existing supporters who, currently, measure only 2/3 (if that) of National.

  21. Jack Ramaka says:

    The problem is with people who tell lies they sometimes forget which lie they have told. If you tell the truth you can normally remember what you have said.

  22. bbfloyd says:

    @Phil..’hopefully with an interested MSM’. Good luck with that one….It’s already been buried…

    It wiil take a concerted, and persistant campaign to get this issue to the point where there has to be a real response by the relevant bodies..(the privilages committee?)

  23. bbfloyd says:

    @jennifer “a smiling rat in an Armani suit wearing a Cartier watch”. :-) Perfect imagery..

  24. [...] And at the head of this government we have John Key. A dealer. And he has done exactly what we empowered him to do, and his nature compels him to. Done deals. Gave away contractor rights to Hollywood to get invites to Dinner. And now Sky City – what deal has he done there? There is no doubt he perverted a normal tender process to give the deal to Sky City, and we just have to wonder why. For the leader of a non-interventionist party, it seems so inappropriately fishy to intervene. Go figure. The smell from the leader of our country is not pleasant, and he arrogantly carries on saying the report forgives him. Not the report I read. Only Steven Joyce’s spin on it was worse. David Cunliffe summed it up beautifully: http://blog.labour.org.nz/2013/02/20/today-the-house-must-not-win/ [...]

  25. Matt says:

    @bbfloyd – Sorry, but my statement was not a historical one at all. Our right to economic self-determination will ALWAYS be the consequence of govt action. If it chooses not to, well that tells you enough about their intentions.

    Banks are ALWAYS under the jurisdiction of the state regardless of ownership. They can’t do what they do without the states say-so. Again, who’s in charge? Who does what?

    @David – Well, the “reliance” on foreign capital is a myth – ala China “funding” American, and us to supposedly! Foreign ownership of NZ govt bonds is a result of trade deficits and you could to say ridiculously high interest rates. It’s neo-liberal by your narrative.

    KiwiSaver demands higher govt deficits by it’s nature. As well as being, again, driven by neo-liberal theory about the “affordability” of NZS. Which is never in doubt.

    You could go far further with KiwiBank, like too many SoE’s it’s “profit-seeking” and by nature no different to private enterprise.

    And finally, Labour CGT is weak, politically appetising, but full of holes which I imagine will be a godsend to English and co.