SkyCity doesn’t need taxpayer


Sky City is reviewing the design of the International Convention Centre in Auckland and won’t be asking taxpayers to contribute to it.

Economic Development Minister Steven Joyce today announced that the Government and SkyCity have reached agreement on the next stages of the International Convention Centre (NZICC) project.

SkyCity has agreed not to pursue a financial contribution from the Government and instead will amend its design to ensure the facility can be completed without financial input from the Crown.

“I welcome SkyCity’s agreement with the Government’s approach,” Mr Joyce says. “This clears the path for the project to continue.

“I have repeatedly stated since December that our least preferred option is for the Government to contribute funding for the project. I am pleased to confirm that will be the case.”

SkyCity submitted a Preliminary Design for the NZICC in October 2014 for approval by the Crown.  However the total construction cost exceeded those costs as set out in the NZICC Agreement. 

“The Crown has also indicated today that it may be prepared to accept a slightly smaller NZICC, if that is required to meet the agreed total construction cost,” Mr Joyce says.

“SkyCity will now work on a revised Preliminary Design in the coming weeks and will submit it on a date that will be agreed by both parties.

“The Government is pleased to be moving forward with this project which will create 800 permanent new jobs, an increase in GDP of $49 million, and an important public facility for Auckland.”

Public reaction to the suggestion that taxpayers contribute to the centre was almost unanimously negative.

Most people accept the need for continuing fiscal restraint. Most accept that health, education and supporting earthquake recovery in Canterbury are priorities. Few, if any would accept any contribution to the convention centre as either necessary or desirable.

The 800 permanent new jobs and an increase in GDP of $49 million are significant but those benefits would count for little or nothing in the eyes of taxpayers if they were expected to contribute to the building.

The original deal was sold as not requiring contributions from either taxpayers or ratepayers and, thankfully, yesterday’s announcement means that is still the case.


Case for convention centre


The International Convention Centre Bill passed its third reading this week.

“The New Zealand International Convention Centre Bill is another example of this Government’s drive to create new investment, jobs and growth for New Zealanders,” Mr Joyce says.

“It gives effect to the 368-page agreement signed in July between the Government and SkyCity to build a world-class convention centre in Auckland that will be a major asset for New Zealand.

“The 3500-seat Convention Centre will generate significant spin-off benefits including a projected $90 million annual injection into the economy; an estimated 1000 jobs during construction; and 800 jobs once it is up and running.

“For the last 20 years the tourism industry and business sector have been seeking an international-sized convention centre to be built in New Zealand to ensure we compete with Australia and Asia by tapping into the growing market of high-value business visitors.

“The New Zealand International Convention Centre is part of the Government’s Business Growth Agenda of building a more competitive and productive economy that creates jobs, lifts incomes, and boosts the standard of living for Kiwi families.

“Parties in favour of jobs for New Zealanders have supported the Bill and the building of the convention centre. Parties that don’t care about jobs for Kiwis have opposed it. In the case of the Labour Party, that’s despite being supportive of a similar deal for a much smaller convention centre back in 2001 when they were in Government.

“For little, if any, investment by taxpayers, New Zealanders will reap the benefits of a $402 million international-standard convention centre including an increase in GDP, new jobs, improved competitiveness as a business events destination and the attraction of more investors to New Zealand.”

The combination of tartan genes and  a Presbyterian upbringing protect me from the supposed allure of gambling and casinos are my idea of purgatory.

But I don’t have any problem with people betting providing they can afford it and they’re not addicted to it.

Given he danger of addiction and the harm it does, I’d prefer the strictly regulated and controlled environment of a casino than the unmonitored and more accessible pokies which can now be found in most pubs.


Photo: This week National passed legislation that allows a world-class convention centre to be built in Auckland. This is just one of around 350 initiatives in our Business Growth Agenda to create jobs and help our economy grow.

Labour’s Green problem


Labour’s new leader David Cunliffe has a propensity for changing to suit his audience.

If it’s a matter of style it might not matter, but when it’s substance it does as John Armstrong points out:

To show he is still boss, Key rode into town this week with all guns blazing.

For the first time outside the parliamentary chamber, he had Cunliffe very much in his sights.

The Prime Minister claimed he had information that Labour’s leader had privately told SkyCity’s management that although Labour’s official line was that the pokies-for-convention-centre deal was shonky, Labour would not accede to the wishes of the Greens and rip up SkyCity’s contract with the Crown.

Facing his first real test as leader, Cunliffe vigorously denied the charge before deliberately ducking and fudging to such an extent that confused reporters drew completely different conclusions about where Labour stands on the matter.

This is not a tactic that Cunliffe can resort to using too often.

Being a different person to different people is one thing, saying different things which sends messages which are mixed or worse, contradictory, is another.

Key will keep up the pressure. He knows Cunliffe is in a very difficult position.

On the one hand, there are those in Labour who would seek to nobble SkyCity as a matter of principle.

Others take the view that an international convention centre means jobs, and Labour’s supporters in lower socio-economic areas would take a dim view of the party kiboshing the project.

Moreover Labour cannot afford to be seen to be ripping up contractual obligations, thereby destroying its credibility with international investors and the moderate voters Cunliffe must win back from National to gain power.

Here lies Key’s wider strategy. Labour needs to show it can work with the Greens to convince people that a centre-left government is a workable proposition.

At the same time, Labour needs to create some distance between itself and the Greens to avoid accusations it is in their pocket.

Winning back votes to the left of Labour will do nothing to grow the left’s vote.

They’ve got to win votes from the centre and even right to grow the how left vote and that will be very difficult when moderates in the centre are at least as averse to the far left as they are to the far right.

Labour’s Green problem is its biggest potential coalition partner is also its biggest rival for far left votes and biggest liability in attracting votes from its right.



AG clears SkyCity deal


The Auditor General has cleared the Government in its dealings with SkyCity in neegotiations over the building of  a convention centre in Auckland.

Economic Development Minister Steven Joyce today welcomed the release of the report by the Office of the Auditor-General (OAG) into the expressions of interest process for an international convention centre in Auckland.

“The report dismisses the Greens’ claim that SkyCity was given an unfair advantage in the bidding process. The OAG makes it clear it has seen nothing to suggest the final decision to negotiate with SkyCity was influenced by any inappropriate considerations,” Mr Joyce says.

“Labour’s accusation the Government misled the public on the costs of the negotiations is also without substance as the report states it is inevitable that there will be costs involved in properly negotiating a complex commercial arrangement of this kind.”

The report examines all three stages of the process to date and concludes that the initial stage (feasibility and exploratory) and the third stage (current negotiations) are appropriate. It raises procedural issues with the second stage, particularly in relation to officials seeking a clear understanding from SkyCity in regards to the parameters of a possible arrangement before making a recommendation to Ministers.

“However the report accepts that a great deal of careful work was carried out by officials to understand the market, and that officials were acting in good faith. The report stresses that the issues were procedural rather than about the substance of what was being considered,” Mr Joyce says.

While the report concludes the EOI process run by Government officials did not meet all Government procurement practices; it notes the unique proposition in which SkyCity would fund the entire capital costs of building a convention centre.

“It makes the point that submitters understood in 2010 that Government finances were constrained and that no other submitter appeared to have been likely to be able to adapt their proposal to enable them to fund the full construction costs,” Mr Joyce says.

“Furthermore the OAG states it has not heard any comment to suggest submitters couldn’t understand the reasons why the Government might prefer SkyCity’s proposal.

“In reality, SkyCity’s bid provided the best location – close to CBD, accommodation and transport – they had experience running a convention centre, and had the most developed plan with the greatest benefit for taxpayers over the four other bidders.

“An international convention centre in Auckland will be a major asset for New Zealand and will generate significant spin-off benefits including a $90 million annual injection into the economy; an estimated 1000 jobs during construction; and 800 jobs once it is up and running.

“Government officials are working hard to conclude negotiations with SkyCity and will ensure any deal done is in the best interests of New Zealanders.

“Officials will carefully evaluate the report and incorporate its conclusions both in future procurement processes, and as part of the procurement policy work now being developed across Government.”

Another Green conspiracy theory bites the dust.

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