Will Key become Johnny-no-friends?

Pokie trade-off may be too great a gamble

VERNON SMALL
Last updated 05:00 12/04/2012
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ANDREW GORRIE/Fairfax NZ

IN THE SPOTLIGHT: As the Government fights brush fires on all sides, the SkyCity issue is just another it does not need.

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Vernon Small

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OPINION: Selling out has a long and ignoble history.

Esau did it for a mess of pottage. Judas gave it a whirl for 30 pieces of silver. Faust did it most spectacularly, but at least he got unlimited knowledge and worldly pleasures.

But it is hard to see what the Government is going to get in exchange for allowing SkyCity an extended licence and hundreds more pokies.

It thinks it is gaining a "free" national convention centre worth $350 million, tourist dollars and jobs.

What it will actually get is a mass of problem gamblers, a pile of extra tax from a social "bad" that will be outweighed by the social cost and a nasty precedent.

Negotiations are still under way behind closed doors, and the public is being denied details - beyond John Key's assurance that the extra one-armed bandits will be less than the 350 to 500 mooted.

It might be an economic proposition for the Government, but it is a dollar to a row of cherries that SkyCity would not be doing it if it did not stand up on the numbers long term. In short it will expect to get enough revenue from the extra machines and the extra patronage to make up for the outlay.

If Mr Key is listening he will realise he is Johnny-no-friends on this one and direct Steven Joyce to find a sticking point that will scupper a deal.

Because it is hard to find anyone outside Government and SkyCity who shares Mr Key's enthusiasm for the deal.

He has tried to push the line that the reduction in the number of machines, driven by local government and backed by community pressure, will allow the casino to have more while continuing an overall reduction in Auckland.

It is a sort of "more is still less" argument that smacks of moral relativism, not principle.

Perhaps the magnetic attraction of "free" money has pulled his, and the Government's, moral compass out of line, but the problem Gambling Foundation's numbers are compelling; eight extra problem gamblers for every 10 machines, and for 70 per cent of the people they see, pokies are the problem.

Yet it is not just the social ills of gambling that are the issue here.

Businesses, too - which might on some issues be attracted to a deal-making Government - are balking at the crony capitalism implications of the deal. It is the opposite of a level playing field and the antithesis of good law making.

And there is a glaring precedent from across the ditch last year that should illuminate the issue for any ministers still in the dark.

When SkyCity offered to spend $312m redeveloping Adelaide's Riverbank Precinct in return for a review of gambling taxes, South Australian treasurer Jack Snelling told the company it was "dreaming" and showed the idea the exit.

If a similar tradeoff goes ahead here, how long before we see a liquor company push for more licences in exchange for a town hall, or a sports stadium? And what would be the principled reason for rejecting it?

It is not the first time Mr Joyce has been linked to such arrangements, and in the past he has got some undeserved bad press over them.

He was there when the Government negotiated the Hobbit deal with Warner Bros, which was less than desirable law-making but at least homegrown movie production is a desirable outcome.

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He was also there, and unfairly maligned, when it was decided (despite Treasury's disquiet but in the face of furious lobbying) to allow radio company MediaWorks to pay for its licences over five years and pay 11.5 per cent interest, rather than pay for them up front.

In that case a market interest rate ensured only minimal risk for the taxpayer, although there was a theoretical argument it favoured an incumbent over possible new entrants.

All the same, it was nowhere near in the same league as the proposed deal with SkyCity and Mr Joyce's well-tuned political antenna are deceiving him if he thinks otherwise.

And how bad would it look if the deal went through ... and then National also voted against the Green's bill to register lobbyists?

As the Government fights brush fires on all sides, the SkyCity issue is just another it does not need.

In recent days Mr Joyce has played down the chances of striking a deal, pointing out that either party could yet walk away.

So perhaps he is preparing the ground to pull out of the sellout.

If so it will be a canny call.

- The Dominion Post

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