Sky City turns Steven Joyce into the Labour and Green Parties’ whipping boy

via Newstalk ZB

via Newstalk ZB

Stephen Joyce must be wondering: with friends like Sky, who needs enemies?

Opposition parties are urging the Government not to fund a cost blowout in SkyCity’s proposed new international convention centre in Auckland.

A resource consent application lodged on Friday revealed the centre’s initial $402 million price tag is set to increase by $70m to $130m.

Economic Development Minister Steven Joyce blamed inflation, and said the cost differential will be addressed through savings on the project, including in procurement.

He’s fine tuned his message.  Earlier in the day he said he couldn’t rule out that the Tax Payer would have to stump up hard cash.

Green Party Auckland spokeswoman Denise Roche says the pokies-for-convention centre deal was “a dog” from the beginning.

“(Prime Minister) John Key brokered a deal with SkyCity which will allow the casino to massively expand its gilded empire in the centre of Auckland city.

“Almost all the so-called benefits that convention visitors will bring to Auckland will be consumed by SkyCity and its onsite restaurants, shops and hotels,” she said.

Labour’s Economic Development spokesman David Clark said a cost blowout and new round of negotiations was always going to happen.

“Sadly, it is the taxpayer who will pick up the cost of National’s incompetence as Steven Joyce has shown he is an amateur negotiator,” he said.

Well, let’s reserve judgement for now, although it does appear that Sky City moving the goal posts at all strongly indicates the government didn’t lock the agreement down properly.  I think it is clear that the general response from the country is that Sky City shouldn’t get a single cent of tax payers’ money to build its private assets.

Amusingly, Labour and the Greens both mooted that they’d look for every possible way to get the deal reversed after taking office as the new government, but it appears that Sky City is doing them the favour of doing it for them.

Farrar will be feverishly polling to return the bad news.  If National so much as spends $1 on paying for Sky’s private assets, the voters won’t let them forget it in 2017.

– NZN via 3 News


THANK YOU for being a subscriber. Because of you Whaleoil is going from strength to strength. It is a little known fact that Whaleoil subscribers are better in bed, good looking and highly intelligent. Sometimes all at once! Please Click Here Now to subscribe to an ad-free Whaleoil.

  • Skydog

    If National do this, they’ve lost my vote. Nothing more, nothing less.

    • Rex

      Oh wow. You’re not a National voter anyway!

      • Skydog

        Matt Doochey would be very disappointed to read your post.

        Can you send me a link to how you know who I voted for?

        I’m not one eyed any party. I’ve voted for National the last three terms. If they go down this path its very dangerous and I can see no political advantage of them assisting Sky City. It would go down like a lead balloon.

    • Monty Bank

      Getting sick of corporate welfarism, me.
      A long line of corporates in the line, from Comalco, the “Hobbit Industry” Sky City….. Don’t get me started on the construction industry…

      Signed disgruntled taxpayer…
      Time we were gruntled…. Will FREED help?

      • Mainstream Mike

        Corporate “welfare” is nothing more than giving companies their own damn money back!

        For every $1 of corporate “welfare” the Key government gives bludgers around $50. Going to vote for that $50 rather than the $1?

        • Skydog

          If Sky City have run short of funds, why not ask their shareholders for further capital and see what they think?

  • Benoni

    When these type of projects are desperate for cash it is a great negotiating position to be in as a provider of the cash. A 1 dollar of input for 2 dollars of equity would seem fair. Sky city would run those assets at a loss so the equity would need to be in the revenue side of things with a guarenteed percentage of turnover rather than profit.

  • Iera

    Media –
    However, design improvements and sensitive treatment of historic buildings have blown the cost estimates for the project out to a range of $470-$530m.

    • Economic Development Minister Steven Joyce blamed inflation

    Who doesn’t know what is going on?

    • Kiwibabe

      Inflation my foot. Inflation is anaemic. More like excessive ambition on part of Sky City and or gross under estimate previously.
      And about Len’s train set budget….

    • Platinum Fox

      Sensitive treatment of which historic buildings? I realise the site abuts the Albion Hotel, but other than that I cannot think of any building on that entire block with any historic standing.

  • Rex

    As I said yesterday as a substantial Sky shareholder I would rather see Sky drop the whole convention centre idea. Watch the lefties bleet then if they (Aucklanders) have to pay for it themselves. This would give Key ammunition to have a go at the left for ruining the deal. Sky could pay us shareholders out a dividend PLUS their shares would skyrocket! Win Win.

  • Aucky

    Just a negotiating ploy by Sky City to extract the very best possible deal for its shareholders. Calm down everyone.

    • LabTested

      Maybe, but Joyce should not be giving this story any oxygen. A straight bat is needed – ‘It’s a Sky City business decision on whether they want to proceed. Nothing to do with the government’

  • mike

    Just point Farrar in the direction of these posts… he should get the idea pretty damn quickly that if National does this they will be in opposition a long time.

  • Mainstream Mike

    If National so much as spends $1 on paying for Sky’s private assets, the voters won’t let them forget it in 2017.

    Oh come on. Howevermany billions National shovels to Sky city – at least it’s building something productive in Auckland. All National is really doing is returning Sky city’s (ruinously high) corporation taxes to the company that earned them.

    Labour and the Greens, on the other hand, will take billions more from the taxpayer and flush it all away on benefits to bludgers. If taxpayers don’t forget a few hundred million more for Sky City, I sure they won’t forget the tens of billions Labour will borrow and flush down the toilet on welfare.

  • Warren Murray

    Joyce looks very flat footed. His short statement is loafed with contradicting double speak. Apparently, inflation is running at about 25%. The price has gone up because of this rampant inflation. Materials will cost more, etc, yet it wont cost more because of smart procurement. The taxpayer will kick in more money / no it won’t.

    The whole deal looks dodgy.

    If the country really needs this, the government should build it and operate it. The arguments for having it are reminiscent of the THC and that worked well. Um wait….

    Still, when (if) it is built, there will be a very handy asset full of pokie machines sucking up the money of lower social economic fools who go there and somewhere for Chinese gangsters to go and launder their money. Yep it is a great economic development initiative / corporate welfarism / payback for some favour in the recent past.

  • Skydog

    On the balance of probabilities, I would guess funding of Sky City would lose more votes than it would gain. So why do it?

    Those who agree with funding would most likely vote National anyway.

    To me it’s not about the convention centre its about looking toward 2017. Lets not give any ammo to the left, lets not give any reason for swing voters to swing left. Play it safe, NO DEAL!

  • GMAK

    That is interesting. I cant remember inflation being 17-32% for the last few years……maybe I missed that memo.

    • The2Game

      Yep, I thought this Government had done a great job re inflation in recent years.

      Since 2000, New Zealand CPI (’consumers price index’) inflation has averaged around 2.7%.

      • Kiwibabe

        Yes, This is Joyce’s equivalent to Key’s tax cuts comment. Back to the otherwise good work please National!

  • Mine it,Drill it,Sell it.

    Last time I was is a Casino the rules are the same world wide.,lay your cards on the table win or lose you can not go back to the Dealer.

  • Euan Ross-Taylor

    Does anyone know whether the ‘deal’ of Sky City getting the extra tables is contingent on having completed the Convention Centre? I hope the deal did not allow Sky to have extra gaming facilities because of the deal itself rather than the deliverance of the Convention Centre.

  • Not Clinically Insane

    Joyce needs to pull his ego back on this and simply say no. To do otherwise would be venturing on political suicide

    • Michael_l_c

      Sky City has had the plans drawn up & they have included too much. They did the deal. This convention centre, for this much money. Put up or shut up or don’t build the convention centre.

  • Kiwibabe

    Agree, would be a serious mistake for National to put anything at all into this.
    That would hand major ammunition to the opposition, as well as being entirely wrong.

  • ex-JAFA

    Does anyone know if the construction going on at TVNZ is as a result of the property they’ve lost to the convention centre next door? Given we’re paying for that work, it’s a mite cheeky to expect taxpayers to chip in for any convention centre cost overruns.