Editorial: Principles at stake in SkyCity deal

File photo / Dean Purcell

The Government's deal with SkyCity for a national convention centre is an inelegant and inappropriate solution to a challenging problem. Under the proposed deal, which is yet to be signed, the casino would build the centre and the Government would relax gambling laws to allow SkyCity to expand.

This deal suffers not only because it would add up to 500 casino pokies with their potential to add to gambling addiction, as troubling as that is. The deal would also allow a broader expansion of casino operations with an unspecified increase in gambling tables and automated gaming included.

More fundamental is the illogical linking of two separate issues: the public need for a tourism facility and a private gaming company's desire for a relaxing of its governing law. It is not the Government selling legislative change to the highest bidder, as opposition parties allege, but a Government wavering on principle, both economic and legislative.

To avoid spending hundreds of millions to build a convention centre the Government is willing to negotiate changes to a law passed by parliamentary conscience votes. That law put restrictions on the casino for good reason. They were not inserted with buy-out clauses as suggested in the current deal.

SkyCity should not be faulted for negotiating poker-faced for its interests. Some would say it is a win-win business decision. But government is not a business; its responsibilities are deeper and broader than the commercial.

If Parliament and the public believe SkyCity has good cause to expand its casino operations, that should be considered rationally and transparently. If the case for a convention centre is convincing, as interested parties claim, then it should too be considered on its merits, not funded by a back-channel policy subsidy.

If the public did end up paying, it would not be for the full price of the SkyCity proposal. Other contenders would have invested part of the cost and their plans might not be as expensive overall.

In effect by changing the gambling law to have an unrelated building constructed at no cost to the public, the Government would undermine economic probity. Goldman Sachs has estimated SkyCity stands to gain $40 million a year in profits if its gaming expansion gambit succeeds. It is the opposite of a level playing field. A return to support for vested interests.

The logic of permanently boosting a private company's profitability for a short-term capital injection is thin. Why not allow SkyCity a second casino if it will fund a new cruise ship terminal on Queens Wharf?

Or support Ngati Whatua's alternative tender if it gets on and plants a tree on top of One Tree Hill? Or grant Lion Nathan a relaxation on liquor advertising laws if it pays for a new hospital?

The Government makes much of the future employment offered by the convention centre, but as the Weekend Herald showed on Saturday, even these job numbers are inflated beyond equivalent or bigger centres overseas. The jobs and tourism boost offered in exchange for a bigger casino would also accrue in large measure through any competing convention bids.

Prime Minister John Key says he encouraged SkyCity to enter the tender round for the convention centre. Yet the casino had been pushing its own convention plans for years, in opposition to proposals for the Aotea Centre zone.

The Key Government has not been afraid to invest in projects it rates as delivering economic growth: highways with dubious cost-benefit ratios, the $50 million for the national cycleway for tourism, the Rugby World Cup.

Surely stumping up part of the cost of a vital public convention centre is a cleaner and more economically transparent solution than changing an unrelated law - and handing windfall profits to a casino which was willing to invest its money in conventions in any case.