Nats slam Sky City scam

While NZ Herald reports that Key warm on taxpayer funds for convention centre the reaction has been much colder.

A deal agreed in July 2013 was for SkyCity to spend $402 million on a convention centre based on artists’ impressions.

Late last year, the casino announced that increased construction costs and “design improvements” had seen the bill blow out to up to $530 million, and taxpayer help was needed.

At the very least a business case that far out of whack should raise alarm bells. Being funded by Taxpayers after the whole deal was based on a promise of no cost seems ludicrous, but that seems to be ther Governments intention.

However, Mr Key signalled a preference for at least some public money to be used on SkyCity’s new, more-costly plan.

Mr Key yesterday expressed doubts over the wisdom of insisting the casino sticks to an initial plan to spend $402 million to build and operate the convention centre, saying he would “hate to see some sort of eye-sore constructed downtown”.

Has Key not noticed what downtown Auckland already looks like? Another eye-sore  wouldn’t look out of place.

It isn’t suprising that the left strongly opposes the Taxopayers propping up what was supposed to be an agreement with Sky City’s proposed convention centre and expanded gambling business.

But the response from National’s support base has been just as chilly.

Nat cheerleader David Farrar posted Better a free eyesore than a taxpayer funded colliseum.

If the extra money will improve the construction so that more groups will want to use the convention centre, then that is a commercial decision for Sky City. It is not an issue for the taxpayer.

There are two acceptable choices for me.

  1. Sky City builds it with no taxpayer subsidy
  2. Sky City doesn’t build it

Comments from right and further right in comments are more scathing. Manolo:

If John Key gives up and agrees to a subsidy it will become his and the National Party’s Waterloo.

Likes 36, dislikes 1

Souvlaki:

Yep…I’m a National supporter.They will lose my support …along with thousands of others ! Key does this as reported and its the same as Abbott ” Knighting ” the Duke of Edinburgh ! Stupidity beyond belief !!

Likes 23, dislikes 1

Alwyn:

I think that, if the Government go ahead and put up money for this scheme it could be their downfall.
That would require that Little stop worrying about exactly which day Key knew about Sabin’s actions and that he stop giving National free hits by ruminatiin on Maori having different rights to other New Zealanders.
Little should concentrate on this matter. If National put up the money he can hammer it for the next couple of years, and if they don’t he can claim that they were going to but that he forced them to back off.
Personally I think this is one item that will resonate with the New Zealand public.

Likes 22, dislikes 1

It should be noted that likes/dislikes are indicative but not quantatative, most readers don’t tick.

Interesting that while Cameron Slater posted THE GREAT SKY CITY TAX PAYER ROBBERY, COMING TO A TROUGH NEAR YOU he seems to be quiet on it now.

And comments here yesterday should be a chilling warning to Key and Steven Joyce, who seem to be putting political face saving ahead of business prudence – except if the proceed with a handout to a gambling company they are likely to be slapped in the face, politically.

Maureen:

The Flag, Skycity and Sabin continuing to sit as Chair of the Select Committee are three reasons I won’t be renewing my NP membership just now.

Sponge (also posted at Kiwiblog):

I can see the argument for the Govt chipping in (I can see the reasoning but think it is a shit argument) but from the perspective of giving the opposition a stick to beat you with this is staggeringly stupid. The Nats are now in a no win and no way out situation about SkyCity.

I got an email from National today asking me to renew my membership. They will be getting a shitty response and no money in return. John Key really seems to have developed a cloth ear in the last few months. He needs to get his shit together and pronto. Think of what the government could have been like if JK had not won – that is what we will be facing if they don’t get their fucking act sorted.

Maureen:

I wrote back to the National Party advising why I’m reserving my options. The flag is just a sideshow, taxpayers/ratepayers funding the casino is intellectually insulting, and leaving Mr Sabin in such a position while under a serious investigation – stinks of corruption. Not happy.

Goldie:

I find it hard to see the Government giving money to Sky City.

National are a minority party – they still depend on either Maori Party, Peter Dunne, or Act to pass supply bills. If any of those three passed an appropriation for SkyCity, they’d be flayed alive by their supporters.

And their own backbench are likely to become pretty restless over this. While ring-in opinion polls on Campbell Live are unreliable, a 97% NO result is still pretty decisive on public opinion on the matter.

If Key and Joyce try to prop up a smelly deal with Taxpayer money it’s likely to be a major nail in what’s already a term of arrogance that may become their political coffin.

Leave a comment

12 Comments

  1. Three Monkeys

     /  11th February 2015

    Everybody makes a fortune when they can prey on the New Zealand taxpayer.:(

    Reply
  2. Three Monkeys

     /  11th February 2015

    Anyone can make a fortune when they are allowed to prey on the New Zealand taxpayer.

    Reply
  3. Maureen

     /  11th February 2015

    Sky City’s moniker for the New flag. Ca-Ching.

    Reply
  4. rayinnz

     /  11th February 2015

    It will be interesting to see how long it takes for National to reverse its present position on the Conference Centre
    That is if they really are “polls driven” because there is bugger all support for this madness

    Reply
    • Sponge

       /  11th February 2015

      Thats what I find so amazing. The ineptitude of the Government in getting itself into this pickle. When they back down they will look weak as well. It is just stupid politics. Is Joyce responsible for this? I thought more of him.

      Reply
  5. On a point of order, as a relative newcomer to NZ:

    I understand the deal is predicated on the principle that casino build the conference centre at their own expense, and in exchange the government pass legislation extending their license to operate the casino operation in various ways. Is that correct in general principle?

    It sounds a rather seedy deal to me. But, the biggie: why on earth would the casino get involved in such a risky deal? One government *cannot* bind all future governments, remember. A license to operate a casino is entirely at the whim of government. A future government, with different policies, could pass new legislation, summarily alter the license, or revoke it entirely, for good reasons, bad reasons, any reasons or no reasons at all, and there’s *nothing* Sky City could do about it.

    That seems a VERY risky platform to spend nearly half a billion dollars on…?

    Reply
    • Alan Wilkinson

       /  11th February 2015

      Mike R, although a future Government may change the regulation Sky City could then sue for breach of contract and damages. Governments are not bound but they are still liable.

      Reply
      • But this government would have met the requirements of the deal; Sky City paid for the conference centre, government passed a law extending the license.

        A commercial contract cannot contain terms binding the ability of future governments to legislate! Let’s say, by way of example, there’s a groundswell of sentiment against gambling in NZ, and a future government is elected on a manifesto commitment to abolish high-stakes gambling, gaming machines, and casino gaming entirely, and only allow (say) small betting shops with a maximum stake of $50. The elected government of a sovereign nation state can’t be bound by a deal made by a previous government that way! They can legislate any way they like, if it’s in the public interest to do so. Sky City would simply be invited to apply to reopen as a small betting shop, if they wished to stay in the industry at all.

        Or, further example, say there was a big problem at Sky City in the future – corruption, violence, money laundering, criminal elements, whatever. The government could, should, and would simply cancel their gaming license in the public interest, just as the council might cancel the liquor license of a bar that’s causing trouble in the neighbourhood.

        Government unquestionably have that power, and it seems – to me – to be a rather dicey proposition. No commercial contract can say “the government may never pass laws to outlaw or restrict our gaming business, nor may they ever withdraw our license to operate”.

        You see my point…

        Reply
        • Alan Wilkinson

           /  11th February 2015

          I see your point but you are wrong. All Government suppliers are entitled to rely on sanctity of contract and Government agencies are just as liable for breach of contract as anyone else. And their contracts can and will contain clauses that place commitments on future Governments.

          Of course in theory any Government can legislate itself out of any commitments and liabilities at any time but the consequences will simply be financial collapse as lenders refuse to buy Government bonds for a Government that has no respect for its commercial undertakings.

          Reply
          • I both agree and disagree 🙂

            Your point about sanctity of contract is correct and fair. And yes, a government can legislate its way out of anything, as you put it; I’m glad we can at least agree on that. But this is about more than a commercial contract; it’s about sanctity of legislation, if you see what I mean. It would depend on the detail of exactly what’s in the contract… and fat chance of THAT ever becoming public knowledge!

            My unease is over the conflation of contract and legislation, and the ability of a contract to tie itself to legislation. Say a future government decided on prohibition; would ALL betting establishments be entitled to some compensation for having their business legislated out of existence? Or only those in some privileged position, who had done a side-deal with the government two decades earlier, say? Were those businesses adversely affected by ‘legal highs’ legislation compensated?

            The government is never under any obligation to grant licenses for such business – gambling, or liquor. You can’t have a law, or a commercial contract, that removes discretion and requires the government to do that. It’s at their discretion. I’m by no means sure that the courts would uphold a ‘shotgun’ contract (You give me a license or it’s going to cost you a lot of money) purporting to enforce something that is properly at the discretion of the government of the day.

            This could be a real minefield, one day.

            Reply
            • Alan Wilkinson

               /  11th February 2015

              It is inconceivable that Sky City would agree to build a convention centre costing hundreds of millions of dollars without watertight contractual agreements safeguarding their ability to fund it. That would certainly include the supply of gaming licences for the agreed length of time. How the Government provided and maintained those licences would be their problem.

          • Pierre

             /  11th February 2015

            If the TPPA passes then Sky City may well have solid grounds to sue for breach of contract AND expect to win. That is, if we believe the rumours about the likely content….

            Reply

Leave a Reply to Mike Ross (@eruptionchaser) Cancel reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s