Even Treasury slammed SkyCity stitch up

58 comments on “Even Treasury slammed SkyCity stitch up ”

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1. Santi 1

   18 July 2013 at 8:17 am

   Treasury has been proven wrong many times. The SkyCity deal is good for Auckland and NZ, a win-win situation, hence there is no reason to oppose it.

   Go ahead and build it.
   • framu 1.1

     18 July 2013 at 8:21 am

     based on what evidence? where is it?

     Surely if it such a good deal the figures that back up that claim would be easily and readily available?

     How do you explain that whenever any figures, from anywhere come to light they all contradict the govt spin?

     and how do the numbers add up once we add a center in CHCH and queenstown?

     “show me the money!”

     and lets not forget that the govt wanted to be able to veto bookings (which reduces income)
   • mickysavage 1.2

     18 July 2013 at 8:24 am

     Gee Santi Treasury has been proven wrong many times but only because of its misplaced trust in the invisible hand of the market. If Treasury is saying that a commercial deal is a dog then it must tbe a real dog …
     • Draco T Bastard 1.2.1

       18 July 2013 at 3:49 pm

       +1
     • dumrse 1.2.2

       18 July 2013 at 7:51 pm

       Treasury wouldn’t know if somebody bit it’s arse. That aside lets see the list of just what it was Sky City wanted versus what it was they actually ended up with. Big fucking difference eh Eddie.
2. Coronial Typer 2

   18 July 2013 at 8:59 am

   “Treasury is concerned that the Crown lacks sufficient leverage in the negotiations.” Which is code for Joyce not seeing how weak he was, and the whole of Cabinet as a result getting done like a dinner.

   Note also Teasury proposing a shorter 25 year concession and that the Crown gets the whole conference facility back after that. Government passes.

   Also Teasury explicitly evaluating the gambling damage to citizens, quite highly. Government passes.

   Now, I have stated before I like the idea of a whole Auckland CBD block being redeveloped. And Treasury are designed to be pessimistic about project benefits – that’s their job. But the documents tell me that only MED would back it. For a project of this scale and risk, getting cross-Deparmental support would be a given, and lack of it should have been fatal. This should have Hebron a whole of government decision.

   Clear from that the Dep Sec for Tourism basically got pulled along on Joyce and Key’s updraft. The worst kind of deals are purely political ones where polices get a rush of blood to the head, seduced by corporate scale.

   Can anyone in the commercial world imagine operating this scale of deal without real precision about your negotiating leverage?

   Pretty shocking reading. Hopefully there’s another dump of more recent documents to come.
3. Wayne 3

   18 July 2013 at 9:00 am

   Treasury’s skills are in macroeconomic analysis, ie projected growth rates, levels of tax and debt, and the proper balance of the size of the state relative to the whole economy. Similarly their analysis on the different effects of say raising GST, relative to other taxes, or the impact of regulation or tarrifs on the economy. Their recent paper on the impact of ageing is a good example of quality work.

   However, they know much less about individual markets and individual firms. Hence I would not put too much store on the Treasury view of whether an international scale convention centre will attract more conventions. The people who know that tend to be in the convention business.

   For instance Treasury likes to analyse the military effect of different defence aquisition choices. Not really their field of expertise. There views are not entirely irrelevant, they at least force Defence to properly verify capabilities against likely risks, but that is about its value.
   • framu 3.1

     18 July 2013 at 9:22 am

     show me the money wayne
     • Wayne 3.1.1

       18 July 2013 at 9:56 am

       Sky City is putting up the money, though of course they do get the right to have 240 extra pokie machines
       • framu 3.1.1.1

         18 July 2013 at 10:03 am

         not quite what i meant

         show me the data that proves this makes sound economic sense
         • Wayne 3.1.1.1.1

           18 July 2013 at 10:43 am

           Remember the issue.

           Several people wanted to build an international convention in Auckland. They mostly wanted money from Govt, except for Sky City, but of course they wanted more pokies.

           The Govt therefore goes for the party who doesn’t ask for money and negotiates on the pokies. So the question is really whether the additional harm (if any) of 240 machines is a proper trade off against the $200 million (around half the cost) the Govt would have had to put up for any other proposal.

           The one thing that is clear is that no one was going to build a convention centre without some concession from Govt, either money, or in the case of Sky City, more pokies.

           The purist might say in that case we would sooner not have a convention centre – presumably that is the Green Party view, since I cannot imagine the Green Party providing taxpayer cash to anyone to get a international convention centre going.

           It is unclear what Labour would have done – would they have paid money for a convention centre, or would they also have contemplated a deal with Sky City, even if not this deal?
           • framu 3.1.1.1.1.1

             18 July 2013 at 10:49 am

             thats a massive rewrite of history and a total red herring. Plus your side stepping the question

             we have repeatedly been told its a good deal – prove it. Where is the independant financial analysis that states a) that we need it, b) that its a sound investment and c) that the sky city deal is in fact free

             show me the money!
             • AmaKiwi …

               18 July 2013 at 10:59 am

               News Flash: The government is appointing a new head of Treasury. Their short list of candidates is Sean Fitzpatrick and David Tua.
               • Rodel …

                 18 July 2013 at 7:47 pm

                 I believe Christine Rankin, Colin Meads and Kim dot com are also on the short list..Oh and Mark Todd’s horse.
             • Wayne …

               18 July 2013 at 12:17 pm

               Why is this a massive rewrite of history. It seems to me to be quite an accurate summary of the situation.

               There were several expressions of interest. All except Sky City wanted govt money. The Govt was not keen on paying money, so negotiated with the one party who did not want money.

               Now obviously the Nats believe an international scale convention centre will bring in more conventions. And they don’t really rely on Treasury to do the market analysis on this issue. That is not something the Nats would really expect Treasury to be competent to do. In fact there are several Ministers who would trust their own judgement on that ahead of Treasury.

               That is typical of all Govts. Ministers make their own judgments on lots of issues. They are not merely ciphers for the civil service, but I am sure you know that.

               There were plenty of occasions when the previous Govt ignored Treasury. You may recall Michael Cullen’s comment about a “Treasury burp”.

               What other things would you add (apart from the usual “the Nats are corrupt”, “the Nats are in bed with Sky City”, “it is a dirty deal”, “laws for sale” etc).
               • framu …

                 18 July 2013 at 12:49 pm

                 well for a start the govt was stitching up a deal with sky city before the tender process even started – or have you just missed that out on purpose?

                 to try and claim that because sky city responded to the tender process with such a good deal that the govt went with them is either breathtakingly arrogant or woefully idiotic

                 either your bullshitting or your uninformed

                 “Now obviously the Nats believe an international scale convention centre will bring in more conventions”

                 well surely they have based this belief on something? They didnt just pull it out of their backsides and plop it on the back of a napkin?

                 as for all your other words – so what? My question that ive put to you 3 times now is “If its such a good deal surely youve got the figures to prove it?”

                 forget treasury, forget labour – wheres the evidence? – show me the money!

                 why has every set of figures and documents that has come out (including treasury) contradicted the govt spin?

                 why did john key personally step in a cancel the feasabiltiy study being carried out?

                 show me the money!
                 • Wayne …

                   18 July 2013 at 1:47 pm

                   I heard Steven Joyce on radio this morning talk about a study done by his Ministry.

                   But to be honest in recent times I have simply followed this issue by reading the newspapers and listening to radio. Though I did quickly read the AG report some time ago. Obviously some years ago I did read a lot of economic analysis on this whole

                   And yes the Ministers took action during the whole bid process once they knew only one party was not looking for money. For them it would have seemed pointless going on with the tender, given everyone else wanted money from the govt.

                   And yes I know there is a little more than pokies involved. But extending the license was a bit of a no brainer. Clearly the Govt was not going to shut down Sky City by not renewing the license, so might as well deal with that now (is I imagine the way that it was looked at)

                   The govt (by that I mean Ministers) clearly are of the view that they think that convention centres make sense. On something like this I accept that PM, Steven Joyce are likely to be correct in their analysis, and that they will have done the work. They know their stuff. I certainly would back them ahead of Treasury.

                   And in my experience Ministers do tend to trust the judgment of their colleagues. They only get those positions by demonstrating to their colleagues that they are competent over a period of time, and on lots of different issues. That only gets shaken if they make a series of bad judgments.

                   I realise that this is a bit holistic, but thats how it is.
                   • framu …

                     18 July 2013 at 3:17 pm

                     all fair enough – but i will note that no study appears to exist – otherwise joyce et-all would be pointing at it ad-nauseum

                     “On something like this I accept that PM, Steven Joyce are likely to be correct in their analysis, and that they will have done the work”

                     considering this isnt the first time theyve been caught out making stuff up im inclined to disagree

                     why just the other day we found out that the financial claims re: GCSB havent been costed in the slightest

                     so im not going to argue points of opinion (because i think we can both agree thats kinda pointless), but unless a minister can say “well heres the study, knock yourself out” im going to go with the view that no such study exists or if it does it doesnt say what the minister wants it to say
                   • One Anonymous Knucklehead …

                     19 July 2013 at 7:51 am

                     Dr. Mapp, perhaps you believe the things you write, but the fact is the other bidders were not made aware that the government was prepared to put our laws up for sale.

                     They were never asked “instead of government funding, how about we change the law in your favour, and you flick the National party an anonymous donation?”
               • cnrjoe …

                 18 July 2013 at 1:01 pm

                 You serious wayne? The pokies aren’t the only
                 things sykcity (sic) wanted and get. Legislation, tvnz land, and much more (gaming tables?)
                 I’ve gotten to the stage where everything that is decided from the beehive is a related to what happens inside and around mankeys blindtrusts.
                 What sykcity shares does he have?
                 What construction firms, chinese gambling and sex tourism companies does he trade but not trade in?
                 Theres just a greasy money trader stench around everything these daze.
                 Shame on the monkeys who vote for these grinders and this grind.
                 • Wayne …

                   19 July 2013 at 12:29 pm

                   One Anonymous Knucklehead,

                   None of the other bidders were in a business that could have benefited from a law change. Only SkyCity was.

                   A lot of this debate seems to have missed the fact that the Govt approaches these sorts of things (and many others) in a pretty pragmatic way. For instance you and many others seem to think there is some sort of secret agenda. But there is not.

                   The Govt believes an international scale convention centre will be good for NZ (more visitors, more jobs , more growth – for the Nats, all good things). Such a centre can only be in Auckland, so who can do it. Well, SkyCity is pretty obvious, but nevertheless you start a tender. SkyCity comes along and says they will build it without any govt funding. Straight away that is pretty attractive. They need some concessions to do so.

                   Well, they got them before in 2001for the existing convention facilities, so why not just make it part of the deal. I appreciate in 2001 it went through the Commission, so that is a bit less certain.

                   Now of course this is not the way the Greens would do things, they, after all, are the new puritans. So for the Greens everything about this is screamed at high temperature.

                   Actually not so much for Labour – hence the hospitality offered and accepted.

                   But for the Nats this is the pragmatic way to do things. Obviously not everything, but clearly some things. And the PM is a pragmatist, which must be pretty obvious to people by now.
                   • One Anonymous Knucklehead …

                     19 July 2013 at 1:20 pm

                     Obviously there’s no problem, which is why the Auditor General said:

                     “We did not see any evidence of formal discussions or decisions on the evaluation process and criteria, or mapping out of the basic options for what might happen next, or advice to Ministers on how the process would be managed and their involvement in it. We do not regard this as adequate for a project of this potential scale, complexity, and risk.”

                     This is your “pragmatism” – substituting belief (your word not mine) for analysis? Quite literally “nothing to see here”. I’m sure the brown envelopes stuffed with laundered money donations are just an unfortunate coincidence, just as I am sure that the party does not make John Banks level mistakes manufacturing “anonymity” 😉
                   • framu …

                     20 July 2013 at 10:41 am

                     ” SkyCity comes along and says they will build it without any govt funding”

                     which happened BEFORE the tender process started – therefore the tender process was a sham – therefore the govt isnt conducting itself in the manner it is required to – therefore the deal IS corrupt

                     govt not only has to be transparent and accountable – is has to APPEAR to be transparent and accountable

                     why is this stuff so hard for you to figure out wayne?

                     “Such a centre can only be in Auckland” – so why are the also putting on in in CHC (when their own docs state there isnt enough market for both) and trying to put another in queenstown?

                     theres a whole raft of really really zoolander level simple questions on this deal wayne – why cant any of the pro voices address them? – why do we have to have these “well their ministers so i trust them” arguments?
           • Draco T Bastard 3.1.1.1.1.2

             18 July 2013 at 4:26 pm

             The one thing that is clear is that no one was going to build a convention centre without some concession from Govt

             Which would indicate that the “professionals” in the private sector didn’t think it was worth building and so they sold a lemon to government to boost their own profits at the expense of the community.
   • Coronial Typer 3.2

     18 July 2013 at 9:24 am

     Of course they will not be experts in all industries – that’s what Departments are for.

     But they are designed to ask the rude questions, and expect them to be answered. Otherwise you should not get the money from the taxpayer to do the job. And frommy experience they are direct and bracing with it. They are the best black hats we have – certainly better opposition than National gets in parliament.
   • Colonial Viper 3.3

     18 July 2013 at 9:33 am

     Wayne, are you saying that Treasury can’t pull together a decent cost-benefit analysis like any decent economics or accountancy graduate has been trained to do?

     Its interesting you use the example of defence acquisitions, because its been repeatedly shown that the Defence Forces make poor choices in that regard despite your claim that they would know more about “value”.
     • Follow-the-money 3.3.1

       18 July 2013 at 7:46 pm

       Don’t even need to do new analysis. There’s so many convention centres, there will be lots of studies around.
   • Shane Gallagher 3.4

     18 July 2013 at 10:13 am

     Typical strawman rhetorical argument.
4. her 4

   18 July 2013 at 9:03 am

   When did they get TVNZ? Isn’t that the land where it is to be built? Was there a tender process?
   I think this ripoff is just beginning.
   • Tom Gould 4.1

     18 July 2013 at 9:25 am

     Interesting that TVNZ News spun the most government-friendly angle, how SkyCity wanted the moon but hard-bitten Key and Joyce talked them back to earth, cutting a great deal for the folks. Is positive coverage part of the property deal, perhaps?
     • dumrse 4.1.1

       18 July 2013 at 7:55 pm

       Not used to positive opinion are we?
5. Darien Fenton 5

   18 July 2013 at 9:51 am

   Did you see that the government tried to get veto rights over who could book the convention centre so it could keep protestors out. Documents show the Government wanted to have the ability to intervene to “avoid having protest groups hiring the convention centre at the same time as government events, and events that might, in the eyes of the government, damage the reputation of its national convention centre.” Skycity resisted, but they have agreed that they will meet with the government every six months to go over forward bookings so they can raise concerns about proposed bookings.
   • Tom Gould 5.1

     18 July 2013 at 10:38 am

     But isn’t the guts of the deal that SkyCity pay for it, build it, own it, and run it? No sticky government fingers in the mix? Or are the Tories lying again?
     • handle 5.1.1

       18 July 2013 at 3:38 pm

       Their lips are moving.
   • dumrse 5.2

     18 July 2013 at 7:58 pm

     Pour yourself some more, your glass is obviously half empty.
   • RedBaronCV 5.3

     18 July 2013 at 9:01 pm

     Ha ha ha and when there is a change of government then the personna non grata’s will be national party conventions and like gatherings? Or should other parties simply up the fees for those confernces? Anti whaling conferences, anti TPP outings. I can’t wait.
6. AmaKiwi 6

   18 July 2013 at 10:45 am

   Las Vegas is the biggest conference – convention center in the world. Why? How well does Auckland compare?

   Las Vegas has the best live entertainment in North America, maybe the world. Auckland: Zero

   Las Vegas has cheap airfares from everywhere. Auckland: Zero.

   Las Vegas is within driving distance of some of the wealthiest cities in the world (LA, San Francisco, Phoenix, Dallas, Houston, etc.). Auckland: worse than Zero.

   Las Vegas is a shopping mecca. Auckland: Zero.

   Las Vegas has a reputation for hedonism (sex, drugs, partying 24/7). Auckland: Zero.

   SkyCity knew this was NEVER about a convention center. It was always about getting more gambling profits from Kiwis, NOT from foreigners.
   • Draco T Bastard 6.1

     18 July 2013 at 4:41 pm

     +1
7. Willie Maley 7

   18 July 2013 at 10:52 am

   And, surprise, surprise no mention of this in the MSM, at least on their front pages;
   http://www.stuff.co.nz/
   http://www.nzherald.co.nz/
   http://www.3news.co.nz/
   http://tvnz.co.nz/national-news
   Mind you, there is the far more important news, to NZers, of the impending royal baby.
8. Santi 8

   18 July 2013 at 11:09 am

   Sorry, guys, but the deal CANNOT be stopped. Better get used to the idea of the SkyCity Convention Centre. Time to move on.
   • AmaKiwi 8.1

     18 July 2013 at 11:14 am

     It’s about gambling, not steel and glass.

     Gambling laws can be changed. Parliament is sovereign.
     • Santi 8.1.1

       18 July 2013 at 11:22 am

       Since when gambling is mandatory? Do you know there is free will in the world?
       • Colonial Viper 8.1.1.1

         18 July 2013 at 8:08 pm

         Actually you are right. Casinos aren’t mandatory in every city in the world, and if we decided it needed to go, that could be done too.
       • Suitably Clueless 8.1.1.2

         18 July 2013 at 9:16 pm

         Santi, go and read some Sam Harris and let the grown ups talk OK?
         • Paul 8.1.1.2.1

           18 July 2013 at 9:24 pm

           Isn’t it time for bed for the young ‘uns like Santi?
   • Wayne (a different one) 8.2

     18 July 2013 at 11:24 am

     Exactly, but as usual the left just can’t let go of a non-issue for most New Zealanders and have been left squawking over what has now been revealed as a strongly negotatied deal by National.

     You know, more jobs and wealth for the country – but oh no, Labour and the Greens would rather see people on continued welfare.

     And don’t throw me the bullshit line this “dirty deal” is going to create more problem gamblers – you either are or you are not. A couple of additional pokies won’t change the landscape one bit.

     Plus, there is an ongoing contra in terms of a reduction of the number of pokies in the community at large.
     • Lightly 8.2.1

       18 July 2013 at 11:54 am

       of course it can be stopped. it would take just one vote in parliament. one National Mp with a conscience. or maybe John Banks, who hates gambling.
       • Rodel 8.2.1.1

         18 July 2013 at 7:51 pm

         Or a new government..simple.. Parliament is sovereign..They (parliament) actually make the laws in a democracy.
     • freedom 8.2.2

       18 July 2013 at 1:01 pm

       “there is an ongoing contra in terms of a reduction of the number of pokies in the community at large.”
       How do you ignore the fact that your “contra” takes the meager funds those machines were contributing to the community far far away and puts it firmly into Sky City’s profit mix.

       Even though it is taking more money from the community, it is not as if the ‘Pokie funds” were getting where it was intended anyway. Here’s one idea off the top of the head to not only get back some of the obscene amounts earned by gambling businesses but also to highlight the opaque bullshit that is the Community Trust side of gambling in NZ.

       How about any business that wants to operate a gambling service be taxed at least 1% of the gross revenues earned by the gambling side of the business? Call it a ‘Social Harm’ tax. This includes all Casinos, Pokies in pubs, Lotto and TAB operations. No exemptions, no adjustments. All other taxes would still apply but only after the initial 1% of the gross earnings from the gambling has been established.

       With the largesse a Social Harm Tax would secure we could create a new organisation whose sole job is to fund the start up of local/small business investment by and for NZ citizens. A caveat would exist in the funding criteria where any business applying to use the funds of the Social Harm Tax must commit to making annual transparent donations, (of funds or services) to local community group/s that equal a minimum of 1% of gross earnings.* There are numerous groups who would benefit. Schools and Sports Clubs spring to mind as the biggest potential beneficiaries from the windfall of a Social Harm Tax. Not to mention the inherent benfits of more small local businesses working with and for the needs of their local community.

       Many small businesses fail in their first two to three years but those that survive long term would in all likelihood contribute more, in real dollars and value of services directly to their local community needs, than the start-up funding they received. The community is also more likely to support the business as it receives numerous benefits, not the least of which will be more jobs. I can already hear the howls of derision from certain circles as I suggest select businesses are forced to support the community they leech off, but if profiting from gambling is your business then as disagreeable as it is for many, I do think you should be made to pay more tax than other businesses. Partner this Social Harm Tax with a Robin Hood Tax of 0.001% on all bank/stock/finance transactions (which is directly fed to Social Security and Housing programmes) and I am quietly confident that many of the current issues would rapidly dissipate.

       *As they are a seething mess of well-established rorting, all registered charities should be excluded from being able to receive these funds.
   • RJL 8.3

     18 July 2013 at 3:50 pm

     The deal can be stopped at any time.

     The terms of the deal can be changed at any time, by this government or the next.

     The terms around compensation to SkyCity are only as good as the will of the government of the day to follow them.
9. red blooded 9

   18 July 2013 at 11:34 am

   Be fair to what people on this sight continually refer to as the MSM: Radio NZ featured this story throughout today’s Morning Report.

   If Sky City wasn’t making money from this deal, they wouldn’t be in it. The issue comes down to how they make that money, and by increasing pokies they are taking more money out of the pockets of ordinary folk; many of whom can’t afford it and are not making good decisions because they are addicted to this form of gambling. They know it, the government knows it. Even if there is a significant economic benefit from the centre (and I very much doubt it), the people paying for it are not the ones getting the benefit. Now, I wouldn’t particularly want to pay for an Auckland convention centre through my taxes, but if that was the decision at least it could be argued that the supposed boon in economic activity would benefit the state (paying back the costs, over time).

   This is a shonky deal, reflecting warped values.
   • Draco T Bastard 9.1

     18 July 2013 at 4:48 pm

     +1
10. Follow-the-money 10

    18 July 2013 at 7:40 pm

    Aucklanders recall the same arguments being trotted out for the rugby world cup. Good for the economy, lots of tourists, etc. Post-cup, it turned out there wasn’t much to show for it and a lot of retailers who believed all the hype & took on extra staff suffered as a result.

    If a convention centre made commercial sense, it wouldn’t need all the PR behind it, even its current package.

    I get tired of being told half the time that the government has to apply the market test, because the market knows best and the other half that we need to deals like this to shore up the future of NZ. I’m tempted to ask what kind of fools do they take us for, but people keep voting for more.
    • Draco T Bastard 10.1

      19 July 2013 at 12:41 am

      +1

      National only applies the “market test” to things that would benefit the poor. Anything that benefits the rich gets an automatic pass – and the poor’s dollars through their taxes.
    • framu 10.2

      19 July 2013 at 7:20 am

      “If a convention centre made commercial sense, it wouldn’t need all the PR behind it, even its current package.”

      bingo
11. freedom 11

    18 July 2013 at 9:08 pm

    from a FB post

    woohoo ! pokies for everyone ! What the reports fail to mention is a whole range of new pokies are coming out. They don’t pay out cash, but allocate hospital waiting time vouchers and education credits that get used as trading chits for partnership schools. There is ongoing discussion about how best to auction job interviews.

    made me smile,
    then shudder
    realising there are kiwis out there who might actually think it is a good idea?
12. Steve 12

    18 July 2013 at 10:37 pm

    If there was a sound business case for building the convention centre then it would have been built, with or without government concessions.
    But I don’t think there is, or skyshity would have built it.
13. AmaKiwi 13

    19 July 2013 at 2:11 am

    Public morality changes over time. Society goes from Puritanical to laissez-faire and back again on matters such as sex, gambling, and drugs (including alcohol).

    When public attitudes toward gambling become more Puritanical, here are some ways to curb it (and make SkyCity’s 35 year license fairly worthless).

    – Entering a casino becomes like entering a foreign country. You must show a passport and give your IRD number. These are recorded and passed to the Police Problem Gambling Division computer, Social Welfare, and the IRD to identify potential problem gamblers, criminals, and money launderers.

    – Taking more than $1,000 in cash into or out of a casino is a crime punishable by forfeiture of the cash plus a fine equal to 5 times the amount of the illegally transferred cash. Can’t pay? Go to jail.

    – Record and pass to Police Problem Gambling Division, Social Welfare, and the IRD all electronic transfers of money. How much did you charge to your credit card or withdraw from your bank? Where was the money wired to/from? Did you pay tax on your winnings? (Make winnings taxable but losses are not deductible.)

    Because I am anti-gambling, this is one aspect of Big Brother I am looking forward to.

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