Green Party threatens SkyCity law repeal

Last updated 12:34 13/05/2013
Fairfax NZ

The Government has unveiled a deal with SkyCity for a $402 million international convention centre in return for 230 more pokies and 40 extra gaming tables.

STEVEN JOYCE
SEAN WILLIS
STEVEN JOYCE: An international convention centre in Auckland will be a major asset for New Zealand".

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The Green Party says it will repeal a law promising Sky City compensation if a future government imposes regulations which work against it, calling it ''unconstitutional''.

The Government confirmed this morning it had signed a heads of agreement with SkyCity to build a $402 million international-standard convention centre in Auckland.

SkyCity will fully fund the development in return for an extension of its casino licence out to 2048, an extra 230 pokies and 40 gaming tables, cashless gaming and other concessions. The government will approve the design.

Under the convention centre deal, SkyCity will be entitled to compensation if there is regulatory change which affects the business over the next 35 years.

The compensation reflects the fact that SkyCity was investing more than $400 million into the convention centre, and therefore ''requires certainty'' over the regulatory landscape, according to the heads of agreement.

But Green Party co-leader Metiria Turei said the ''dirty deal'' locked future Governments out of making policy regulation to benefit New Zealanders.

''We consider this to be unconstitutional, it is a breach of Parliamentary sovereignty, to lock a government into a commercial deal for 35 years.''

The Green Party would repeal it if it was able to form a government, and it was Turei's intent that SkyCity would not be paid compensation.

''Every government is sovereign, every Parliament is sovereign, and could produce legislation that could change the law to take away their right to compensation. That is the risk they run with this sort of dirty deal.''

Turei said the party was seeking legal advice on the matter, conceding that they may have to compensate SkyCity for any costs it laid out, such as construction.

''If there have already been costs laid out by Sky City there may be justification for repayment of those costs.''

However, the leader of the party's potential coalitiion partner, Labour's David Shearer, could not say whether his party would attempt to back out of the deal if it won the next election.

However, they would be combing over the fine print.

Labour said the agreement between the Government and SkyCity showed the casino operator had hit the jackpot in negotiations.

 

It was a "35-year licence to print money off the backs of problem gamblers," Shearer said.

The Government had done a dodgy deal with SkyCity and locking in future governments was irresponsible and reckless, he said.

Governments must be able to step up and address problem gambling, he said.

"Thirty five years is longer than anybody's mortgage, I mean this is ridiculous."

Labour supported the convention centre itself but not the way the deal was done.

HARM MITIGATION

Economic Development Minister Steven Joyce is confident there is enough in the government's national convention centre deal with SkyCity to mitigate any harm from the extension of gambling facilities.

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To combat problem gambling and money laundering SkyCity will put in place measures including predictive modelling to identify players at risk of gambling addiction, and will require customers to provide identification when they are gambling or collecting more than $500 under the cashless gaming system.

"In our view we have done quite a lot here to deal with the harm minimisation issues," Joyce said this morning, adding that gambling was a legal activity which many people enjoyed.

"Nobody's clamouring to remove Lotto or remove all those other things that involve gaming."

The agreement was good for New Zealand as it would make the country more competitive against the big cities of Australia and Asia, he said.

"This sort of project is exactly the sort of thing we need to lift New Zealand up the value chain," Joyce said.

SkyCity chief executive Nigel Morrison said the agreement was a "true definition of a public-private partnership".

The company was not banking on making a profit out of the convention centre itself, he said. The value in the deal was in the gambling concessions, particularly the extension of the casino licence which had been due to expire in 2021.

"It gives us certainty to be able to secure our long term funding," he said.

"The reality is [convention centres] will never pay their own way. That's why other private-sector bidders weren't happy to put their own money into it."

Joyce said it was important to note that legislation would be required to enable the agreement to go ahead.

The convention centre will cost $315m to build with another $87m to buy the land required. Some of that land is owned by Television New Zealand and Joyce said the state-owned broadcaster was happy to sell as long as the transaction was on a commercial basis.

The convention centre will cater for 3500 delegates at any one time and inject $90m annually into the economy, Joyce said. It is due to open in 2017 and SkyCity will operate it for at least 35 years.

Opposition parties have slammed the deal.

NZ First leader Winston Peters said it showed the Government was more interested in "pushing the interests of an overseas owned gambling den" than helping New Zealanders.

"The fact is that the only industries truly helped by gambling are misery and crime. We already have these industries in abundance so why feed them more?"

He said it was a grubby little deal and showed arrogance and disregard for acceptable procurement standards.

Greens Party co-leader Metiria Turei said the Government would be rubbing their hands in glee.

"At best a Government should suffer a casino and the harm they bring. But this Government is actively going into business with one."

SkyCity was not a good corporate citizen and had a history of inadequate response to its problem gambling responsibilities.

The introduction of ticket in, ticket out would enable anonymous gambling and make problem gambling easier.

"[It] is currently illegal and for good reasons."

While opposition politicians have come out strongly against this morning's news, the business response has been more positive with Air New Zealand singing its praises.

"The planned national convention centre ... will allow New Zealand to compete to host larger conferences, providing access to a new market that we are currently disadvantaged in due to a lack of appropriately sized infrastructure," chief executive officer Christopher Luxon said.

"As an airline based in New Zealand, which has relatively small volumes of business traffic, the conventions market is very important to us and one which we actively target in Australia, Asia and North America.

"The 33,000 extra delegates a year the centre is predicted to attract is a significant increase."

Next month the airline is bringing 80 Australian conference organisers and organisations considering New Zealand as a venue to Auckland for a convention conference, he said.

Conferences held throughout the year would help to reduce seasonal variations in demand for travel to New Zealand, Luxon said.

- Maria Slade, Kate Chapman and Stuff reporters

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