Red Alert

Posts Tagged ‘SkyCity’

The SkyCity Gamble

Posted by on September 3rd, 2013

Many New Zealanders think having a new international convention centre is desirable.  Few of them think paying for it via problem gambling is a good idea.

This Government is pushing a bad deal onto New Zealanders.

Steven Joyce’s own department estimates that 8000 more Aucklanders will be affected by the fallout from problem gambling.  Another report suggests the net benefit of the deal to the economy will be just 18 more jobs.

The Government originally tried to sell this deal as an economic development initiative, but because the economic benefits of the casino deal to New  Zealand are marginal, the debate has shifted to the problem gambling that is paying for it.

Why is the deal so bad? Simply put: it is because the Government *put itself* over a barrel in the negotiations.  A transparent process would have seen competitive bidders. Instead SkyCity were able to name their price from a Government already commited to saving political face through getting this deal done.

The Auditor General certainly pulled no punches in describing the process for what it was: “we do not consider that the evaluation process was transparent or even handed”.

Treasury has made it clear that they are not convinced by the cost benefit analysis presented to Ministers.  Treasury expressed “strong concerns that private benefits to SkyCity will exceed public benefits to New Zealanders.”

The deal buys SkyCity an extra 230 pokie machines and an extension on its licence until 2048 in return for building the New Zealand International Convention Centre.  Even if you put the horrors of problem gambling to one side, comparison with overseas valuation of gambling rights shows taxpayers have been short-changed.

Sudhir Kale, a professor of marketing at Bond University in Queensland, and a friend of SkyCity CE Morrison has worked as a consultant at casinos on five continents.  He says the deal was a clear win for SkyCity. “He’s a friend, but if you want to quote me you can say: ‘Morrison did an excellent job negotiating with authorities’.” Kale calls the 27 year license extension ‘icing on the cake’.

The Treasury were spot-on when they said that public costs will flow to private gain once the centre is paid off.

And there may be worse to come.  The final negotiations on spend for the convention centre are set to happen during election year.  The Government has reserved itself the right to hand more taxpayer cash over to SkyCity to get the negotiation done.

The fact that gambling issues are treated as conscience issues in Parliament presents an opportunity to MPs; we are explicitly invited to exercise our consciences.

You may not have heard of the National MP Peseta Sam Lotu-Iiga but he holds the deciding vote that could stop the extra pokies. Sam comes from a part of the country where pokies do more harm than almost anywhere else.  Signing the online petition to encourage him to change his mind is a practical step you can take to push for change.

Tell us it’s Dunne and dusted now Peter

Posted by on March 13th, 2013

United Future leader and Revenue Minister Peter Dunne’s belated recognition that he holds a casting vote in John Key and Steven Joyce’s shonkey SkyCity convention centre deal is welcome.

The question remains, however, whether Dunne will use his veto to stop the sale of our country’s laws to a casino.

Because he most certainly should.

By Dunne’s own admission the National Government “did play very fast and loose at times” during the rotten tender.

The Deputy Auditor-General was more clear – the deal was “unfair” and managed so the “SkyCity proposal was always going to be the most attractive”.

Last week Dunne (finally) appeared to lay down a challenge to the National Government which he otherwise supports:

There is a time-bomb warning to the government here. Support for the cut through approach will wither if it is seen to be a standard proxy for bending the rules or doing special deals to achieve the desired outcome. While the government is not immediately vulnerable on this issue, the clock has started ticking.

And it is worth remembering the adage, the ends do not justify the means.

Well National has responded to Dunne’s challenge.

I asked Steven Joyce written Parliamentary question [1307 (2013)]:

Does he regret any of his actions as Minister for Economic Development related to the Government’s decision to negotiate with SkyCity Entertainment Group Ltd for an international convention centre; if he does, which actions?

And Joyce has (finally) responded with one word:


This is just about the only time I can recall the Economic Development Minister giving a straight answer to any question. But what an answer it is.

With one word Joyce has confirmed he’s learned nothing from the Deputy Auditor-General’s scathing criticism. He’s thumbed his nose at fair and proper process, at accountability to the people of this country, and at their hard-earned (but fast fading) reputation for having the lowest level of Government corruption in the world. Joyce has effectively confirmed that so long as he’s a Minister he’ll trade New Zealand’s laws if he sniffs a special deal for the big end of town.

So there you have it Peter Dunne. National do think the ends justify the means. The time-bomb has exploded.

And you – and only you – can put a stop to this madness.

The question the whole country wants to know is whether you will. So do it today Mr Dunne.

Dunne and dusted?

Posted by on February 26th, 2013

There is a fundamental difference between the rows and rows of casino pokie machines at SkyCity and the single machine down the local.

Pub pokies are required to return all profits and 37% of revenue to the community, by funding programmes like sports clubs and cancer research.

SkyCity’s machines, meanwhile, return only 0.8% of revenue and a pathetic 2.5% of profits. Talk about the House winning!

As John Key has attempted to squirm away from the scathing Deputy Auditor-General’s report into his trade-the-law convention centre deal, he’s taken to waffling about a “sinking lid” (or overall cap) on pokie numbers in wider Auckland. Now a sinking lid might potentially be a useful idea. But let’s be clear – it’s Council policy, not necessarily the country’s law.

The way Mr Key’s shonkey casino deal is shaping up, the big end of town’s lid will go up. Meanwhile the rent on the non-casino gaming sector will go down, and with it the Crown revenue.

That’s because the PM’s plan isn’t just for a convention palace. It’s about allowing hundreds more casino pokies which don’t distribute their revenue and profits to the community, and fewer pub pokies that do.

The Māori Party are probably opposed to the key polices of the pokie deal. John Banks will probably do anything John Key tells him to do.

So, ironically, the solution to this shambles (and revenue hole) seems to lie in the sole vote of Revenue Minister Peter Dunne.

The immediate question, then, is whether Dunne will pull the plug on the whole fetid casino convention centre deal. Or whether he won’t.

And the really key question is how many Kiwi kids will never learn to swim if the SkyCity deal goes ahead – and what will be the effect on the country’s deficit.

Rewriting history

Having been slammed for its “unfair” casino deal, National’s spinmeisters are rewriting history. Again.

Let’s set the record straight.

In 2001 Judith Collins was chair of the Casino Control Authority. Her authority used powers delegated under the Casino Control Act 1990 to approve a $37 million expansion at SkyCity’s Auckland casino – with new gaming tables and pokies and all the social misery they cause.

So Labour abolished the Authority. We chucked the 1990 law out.

Labour bought in new legislation to control the growth of gambling, prevent and minimise the harm caused by gambling, ensure the money from gambling benefited the community, and ensure the system was fair with limited opportunities for dishonesty.

Today John Key’s National government are trying to do the exact opposite. They’re set to change the law to allow more pokies for the big casino in central Auckland.

There couldn’t be a more fundamental difference.

National’s proxies who are pushing the revisionist spin in the blogosphere are being played for suckers.

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!

Key puts up ‘NZ For Sale’ sign

Posted by on June 13th, 2011

It’s time for John Key’s government to stop being dictated to by multi-national corporations and start putting the best interests of New Zealanders ahead of corporate profits. News that SkyCity has decided to invest in a new International Convention Centre in Auckland is great news for the economy, locally and nationally. But that doesn’t mean we should rush out and change our laws and regulations to suit the interests of SkyCity’s shareholders.

When Warner Brothers held a gun to National’s head, John Key rolled over and changed our employment laws to suit their whims. Now we’re seeing him roll over and offer to change our gambling laws to suit SkyCity. That’s not good enough. The National government should be guided by what is in the best interests of all New Zealanders, not what’s in the best interests of corporate giants.

It’s ironic that National aren’t willing to back New Zealand companies like KiwiRail, preferring to see contracts for new trains and carriages shipped offshore, but when one of the private sector big corporates clicks their fingers it seems there isn’t anything John Key won’t do to please them.