Bad deal

What does it profit NZ to gain a convention centre, but lose its own soul? What price—social or taxpayer-funded—is too high?

The National Party-led Government recently announced a deal that will see a $402 million (roughly US$325 million today) “international convention centre” built in Auckland by a private casino company. National’s “Minister in Charge of Everything”, Steven Joyce, joyfully declared that this won’t cost taxpayers or ratepayers a cent!

Which is not to say it’s actually free, of course, despite Joyce’s breathless cheerleading—nothing ever is.

In exchange for building the convention centre, SkyCity Entertainment Group (which owns Auckland’s casino and Sky Tower, among other things) will have its casino license extended by 27 years, and they’ll also get a 35-year contract to run the convention centre. They say these are necessary to show stability to potential lenders and such. That may possibly be true, but it’s not all they got, of course.

SkyCity will be permitted to add 230 pokies (slot machines), including “cashless” ones and more machines that can take notes higher than $20. They’ll also get 50 more gaming tables.

The National/Act Government will push through the required law changes under urgency so that the people of New Zealand have no opportunity to have their say on the scheme. The license extension itself would normally require an independent assessment and provide an opportunity for people to have a say. None of that will be allowed to happen.

Even worse, National plans to include in the law a provision that if at any time in the next 35 years a future government changes the gaming laws—like, for example, increasing taxes on casinos, then SkyCity will be compensated by New Zealand taxpayers to ensure that the casino doesn’t lose any profits.

To ensure that Auckland citizens and ratepayers get no say in any of this, SkyCity wants their resource consent application to be “non-notified”, which means that no one can object. They argue that since National announced their intention to do a deal before the election, therefore, Aucklanders already had a say. Um, newsflash to the SkyCity boardroom: That’s not how democracy works. The people—real, live, voting people—are supposed to call the shots in this country, not corporations.

It was probably a bad idea for SkyCity to bring up the fact that this deal has been in the works for years, because while government ministers didn’t engage in criminal activity in negotiating the deal, the Auditor-General said that the Government's dealings with SkyCity "fell short of good practice in a number of respects". Chief among them, the government gave SkyCity information that other bidders in the process did not receive. So, while the current government’s backroom dealing over this scheme was apparently perfectly legal, it was clearly, as Labour Leader David Shearer put it, “shonky”.

Of course, taxpayer money going to SkyCity and a lack of democracy are only the starters in this mess: The social costs will be enormous.

I doubt anyone apart from the current government (and SkyCity) actually takes the promise of some mostly unspecified “harm minimisation” seriously. Experts in dealing with problem gambling say that some of the proposed changes will actually make problem gambling worse by making it easier for gambling addicts to gamble away their money.

Steven Joyce correctly noted that gambling is legal, but launched into his typical arrogant dickhead mode by declaring, "Nobody's clamouring to remove Lotto or remove all those other things that involve gaming." Actually, some people are clamouring to remove those: Auckland has a “sinking lid” policy on pokies, and Lotto is not the game of choice for problem gamblers; Joyce ought to know that already.

Actually, one of the problems with this deal is that “sinking lid” policy. It will mean that pokies located in pubs and clubrooms will reduce in number, even as SkyCity increases theirs. That’s a problem because the profits from pub pokies go to charity to support community organisations. SkyCity’s profits go to their overseas owners, not community organisations (a little bit of corporate charity giving notwithstanding).

So, what we have is the current government selling the law—again—to help increase corporate profits. This government is willing to tie the hands of future governments to make sure that corporations can keep those increased profits. The increase in gambling opportunities—which the government admits is where SkyCity will make its money in this deal—will create more problems for those least able to pay (problem gambling in New Zealand is especially prevalent in lower socio-economic groups). And, everyone will lose out because community groups will slowly be starved of funding.

This is a very bad deal, but apparently we can’t do anything about it: The National/Act Government have stacked the deck against ordinary New Zealanders. This is just another example of how they bet against the people of this country, putting corporate interests ahead of those of ordinary people. We need a change of government.