It’s interesting to see Fran O’Sullivan, fresh from attacking the Boag faction and praising Collins over the ACC affair, now having a crack at Joyce’s crony capitalism. Without doubt, Joyce’s dirty deal is a juicy target for his internal critics and an example of this government at its worst.
David Cunliffe has done sterling work bringing the details of this disgraceful ‘law for sale’ deal to the public eye. Unfortunately, much of the media coverage, including Q+A this morning has framed this as a question of whether the trade off between an economic boon from the convention centre and the social damage of more gambling is worth it. This is falsely construed because there is no economic boon from the convention centre – the government’s own numbers show it would barely break even with a BCR of 1.1 to 1.6 ie. barely break even under MED’s operatic assumptions. MED warns that SkyCity would demand ‘subvention’ -ie ongoing subsidies from the council and government in return for the added tourist income the centre would supposedly bring (I doubt it would attract many of these 1000+ person international conventions, not in today’s economic climate and with peak oil making air travel ever more expensive).
Around the world, convention centres actually make their money from these kick backs from governments, not from hosting the conventions themselves. They hold governments to ransom with the threat that they close and the tourist revenue will be lost and, thereby, turn the governments’ tourism revenue into private profit.
So, the convention centre is just a white elephant, which is why no-one will build it without government subsidies. Sky City’s price is a law change to allow it to make at least $40m a year profits and create 400 more problem gamblers. What meagre economic gains a contention centre might generate would also go back to its owner, SkyCity, via subvention.
SkyCity tried the same ‘convention centre for more pokies’ deal in Adelaide and were told to get fucked by the South Australian government.
So, the question isn’t whether we should give SkyCity more pokies and cop more problem gambling in return for an awesome convention centre. It’s whether we should accept SkyCity’s ‘gift’ white elephant, and have to pump millions in every year to feed it, and let them exploit more people in exchange. It’s not one side of this equation that is bad for New Zealand, it’s both.