Shearer David: Questions for Oral Answer — Questions to Ministers Questions to Members 
Text is incorporated into the Bound Volume 
Shearer David: Questions for Oral Answer — Questions to Ministers Questions to Members 
[Sitting date: 20 February 2013. Volume:687;Page:8004. Text is incorporated into the Bound Volume.] 
2. 
DAVID SHEARER (Leader of the Opposition) 
 to the  
Prime Minister 
: Does he stand by all his statements? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 Yes. 
David Shearer 
: Why did he say in June 2012 that “my office has had no correspondence no discussions no involvement” in the convention centre process when he and his chief of staff dined with the Skycity board on 4 November he was given a presentation that evening and he urged them to think outside the box? 
Rt Hon JOHN KEY 
: Quite simply the question the member is asking about that I answered was in relation to the expression of interest process. That was run by Mr Brownlee at that point as the Minister. The point that the member raises is quite right. All of that was in the public domain. I myself said I had had dinner with Skycity. That is all covered in part 1 of the report and in part 1 of the report the Deputy Auditor-General says there are absolutely no issues at all. All of that was in the public domain. 
David Shearer 
: Given that the Deputy Auditor-General found it was “not appropriate” for the ministerial office staff to continue meeting with Skycity why did he allow his chief of staff to meet with Skycity executives five times his deputy chief of staff and the chief executive of the Department of the Prime Minister and Cabinet to also meet with Skycity and himself to meet with Skycity twice—all immediately before a supposedly open tender process? 
Rt Hon JOHN KEY 
: Again I would go through the process. Firstly let us quote from the report. The basic proposition the member is making is that there was some cosy deal. The Deputy Auditor-General says: “We have seen no evidence to suggest that the final decision to negotiate with SkyCity was influenced by any inappropriate considerations.” The Deputy Auditor-General also says in the report that it is actually quite normal and standard for Ministers and the Prime Minister to have discussions with— 
Hon Member 
: That’s not what John Armstrong says. 
Rt Hon JOHN KEY 
: Well the member might not like it because it does not suit his narrative but it is actually in the report if he wants to read it. It is quite normal for that to happen—nothing to see there. The situations the member has outlined all happened in the exploratory phase. In part 1 the Deputy Auditor-General says there is nothing to see there. 
David Shearer 
: Was he warned by Gerry Brownlee on 1 March 2010 that “too many people [were] talking to SkyCity”; if so why did his chief of staff who promised to “step back” continue to meet with Skycity at least two more times? 
Rt Hon JOHN KEY 
: What did happen at that time was that we were moving beyond the feasibility stage to an expression of interest. What happened was that it was logical because there were a number of Ministers involved—me as Minister of Tourism Mr Brownlee as Minister of Economic Development and other Ministers as well because there were a number of proposals. What ultimately happened is that it made sense that because what is now the Ministry of Business Innovation and Employment would run that process one Minister would handle it. That is the way we do things around here: quite often there are a number of Ministers involved and in the end there becomes a lead Minister. That is normal practice. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. The essence of that question was why his chief of staff met after the Brownlee warning. That was not addressed. 
Mr SPEAKER 
: I thought—[ 
Interruption 
] Order! Order! [ 
Interruption 
] Order! It would be helpful if I could make a ruling. I thought the question was satisfactorily answered in that the Prime Minister talked about it being a normal process. There were a number of other proposals on the table at that stage and he felt it was quite normal that his chief of staff and Ministers were involved in meeting potential proponents of the convention centre in Auckland. 
David Shearer 
: Given that his chief of staff asked Skycity what regulatory relief it required in return for building the convention centre was that question put to other bidders; if not does he consider that to be even-handed? 
Rt Hon JOHN KEY 
: There was an expression of interest process where in fact all of those who decided to tender were told actually that the Government was very cash-strapped. Every deal was different in terms of the way it was negotiated. Skycity was in a position where it was able potentially to go through a process where in return for some concessions it was prepared to fully fund the process. In fact this is the whole debate because— 
Hon Trevor Mallard 
: Answer the question. 
Rt Hon JOHN KEY 
: Well I am answering the question Trevor. If you want me to go through it I can. If you want me to sit down I am more than happy to do so. But if you go through the process part 1 the exploratory phase—as the Deputy Auditor-General says nothing to see there. Part 3 the negotiations— 
David Shearer 
: I raise a point of order Mr Speaker. I was waiting for the answer to this question. I actually asked whether the other bidders were offered regulatory relief as Skycity received. 
Mr SPEAKER 
: And the answer from the Prime Minister in my mind was quite clear: all of those involved in the expression of interest process were advised that there was a cash-strapped Government. 
David Shearer 
: I raise a point of order Mr Speaker. With the greatest respect I do not want the answer to be interpreted by you; I want the Prime Minister to answer that question. 
Mr SPEAKER 
: With the greatest respect to you sir you are asking me to interpret whether I think the Prime Minister has satisfactorily answered your question and I was doing that. The member has further supplementary questions if he wants to ask them. 
Dr Russel Norman 
: I raise a point of order Mr Speaker. Your answer was that all the bidders were told the Government is cash-strapped— 
Mr SPEAKER 
: No that was not my answer. That was the answer from the Prime Minister. 
Dr Russel Norman 
: —and the question was whether all bidders were told that they could get—or were they seeking—regulatory relief. If the Government is cash-strapped there is more than one response to being cash-strapped. It could be that they want a low bid; it could be that they are seeking regulatory relief. So for the Prime Minister to simply say the Government told all bidders that it was cash-strapped does not answer the question. 
Mr SPEAKER 
: With respect again I have judged that the Prime Minister has to my satisfaction answered the question. The Leader of the Opposition has further supplementary questions if he wants to delve into the answer by the Prime Minister and that is the way it should happen. It is not for members to take points of order to continue to dispute an answer that is given if I have ruled that it is satisfactory. 
David Shearer 
: Given his chief of staff asked Skycity what regulatory relief it required was regulatory relief offered to the other bidders on the convention centre? 
Rt Hon JOHN KEY 
: Firstly regulatory relief has not been offered to Skycity. That may be part of the negotiations that they want but actually all bidders were told that we were looking for creative solutions and it was a cash-strapped Government. Every bid was different. In fact in the case of every bid with the exception of Skycity they were asking the Government for $300 million - odd to build it. 
David Shearer 
: Is he saying that his chief of staff did not offer Skycity or did not ask it if it wanted regulatory relief or not? 
Rt Hon JOHN KEY 
: What I am saying is that no agreement has been reached with Skycity although we hope one will be. But what is quite clear is that in the early exploratory stages where we had discussions with Skycity I told them myself “Think creatively and see what deal you can come up with.” At that point after we had done that which was all in phase one for which the Deputy Auditor-General says there is nothing to see everything is totally fine and that is OK we went to an expression of interest process. What the Deputy Auditor-General does not like about that process is that she says— 
David Shearer 
: I raise a point of order Mr Speaker. [ 
Interruption 
] I am sorry but I have been very patient. The question I asked was: did his chief of staff ask or offer Skycity regulatory relief? It is simple. 
Mr SPEAKER 
: I think that the Prime Minister certainly moved to the extent of saying that he himself offered regulatory relief. It would be helpful—[ 
Interruption 
] Order! Order! I am trying to rule. It would be helpful if the Prime Minister was able to answer in respect of the chief of staff. 
Rt Hon JOHN KEY 
: That may well be the case—that that is the proposal. But this is the whole point—the proposal of the deal to Skycity was one where we said to Skycity “If you want to come up with a proposal the Government’s preferred position is no cash. Come up with a range of options.” In fact what the Deputy Auditor-General says is that having gone through five people in the expressions of interest what they were unable to do—the officials at that point—was to advise the Government what actually would be on the table. That is what took the extended period of time. The Deputy Auditor-General believes that we should have truncated discussions— 
David Shearer 
: I raise a point of order Mr Speaker. I am sorry to keep doing this but I just want a simple answer to a very simple question: did his chief of staff offer Skycity regulatory relief? It is simple. 
Mr SPEAKER 
: The right honourable Prime Minister. 
Rt Hon JOHN KEY 
: The simple answer is that I am sure the chief of staff reiterated my comments which were to think laterally of which that might be a possibility and that has been the basis of the whole deal. That is the point is it not—to come up with some proposals and we will have a look. The problem with the whole issue was that actually we have been unable to actually assist— 
Mr SPEAKER 
: The right honourable Prime Minister—the Rt Hon Winston Peters a point of order. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. Given who is there now anyone could have the job. My point is this: the Prime Minister is being asked a simple question and he is refusing to answer it. Thinking laterally is not the answer. Did he or did he not or his chief of staff engage in that arrangement? That is what he is being asked. 
Mr SPEAKER 
: And the Prime Minister’s answer at the start was he is sure that his chief of staff repeated the same sorts of offers that the Prime Minister had made to all the bidders about being expansive with their ideas. 
Rt Hon Winston Peters 
: That is not the question. The question is: was there a special offer made? Not to think laterally but the offer. 
Mr SPEAKER 
: Order! That was not the question. The question has now very definitely been satisfactorily answered— 
Hon Trevor Mallard 
: Was the answer yes or no? 
Mr SPEAKER 
: The answer was he was sure that his chief of staff repeated statements very similar to the Prime Minister’s. If members bothered to listen to the question and to the answers I am sure we would have far fewer points of order about the quality of answers. 
David Shearer 
: Given that he told Skycity that the Government was providing no capital funds for the convention centre did he provide the same information to other bidders; if not does he consider this to be even-handed? 
Rt Hon JOHN KEY 
: The member is actually quoting me incorrectly. I said that the Government’s preferred position was no cash input. Yes that was made clear to other businesses that that the Government was cash-strapped and that that was preferred. Yes it was made clear through the expression of interest process that other tenderers should put up the best proposal they could. One happened to put up a public-private partnership which meant the Government paid over a long period of time one happened to put up regulatory changes and others basically put up a proposal where we paid for it. 
David Shearer 
: At what point in his interactions with Skycity was he told that Skycity wanted additional pokie machines as a condition for funding its convention centre? 
Rt Hon JOHN KEY 
: I am sure that would have occurred when the officials came back at the end of phase two and said to the Ministers: “We think you should accept the Skycity proposal. It would require these sorts of changes which would then have to be negotiated in part 3.” which is what we are doing at the moment. 
David Shearer 
: At what point did the Prime Minister come to understand that the condition of Skycity’s bid was that there be more pokie machines made available to them? 
Rt Hon JOHN KEY 
: That cannot be confirmed because we actually do not have a deal with it and it may well come up with a variety of different proposals. But in 2009 when I had the dinner with Skycity and said to think laterally of course I assumed that they would want to have more pokie machines or an extension of their licence. By the way that is exactly what Labour did in 2002. 
Rt Hon Winston Peters 
: What discussions were he and his staff involved in regarding the planned location of the Skycity convention centre on land owned not by Skycity but by New Zealand taxpayers? 
Rt Hon JOHN KEY 
: I cannot detail the exact ones but what was clear was that if Skycity was to build a larger convention centre than the original one they wanted at some point I was aware that they would need to acquire land. That land was owned by Television New Zealand (TVNZ). 
Rt Hon Winston Peters 
: How did Skycity conclude it had access to taxpayer-owned TVNZ State-owned asset land if he did not do a secret side-deal in favour of his mates at the casino on that issue? 
Rt Hon JOHN KEY 
: It is pretty straightforward. Skycity after it decided it would be prepared to enter an expression of interest process to have a larger convention centre went off to its architects. Its architects designed such a thing realised they needed more land worked out who owned the land and approached Television New Zealand. 
Rt Hon Winston Peters 
: If that is true how come Television New Zealand and its board had no awareness of that but Skycity did and is it not true that he promised Skycity that his Government would privatise TVNZ’s assets—[ 
Interruption 
] Well you can laugh but the board has no knowledge. At the time I am talking about it had no knowledge of this so Gerry can laugh all he likes embarrassingly I might say. But the fact is there was a secret side-deal—is it not true Prime Minister—in favour of Skycity in favour of his mates and how sleazy is that? 
Mr SPEAKER 
: The Rt Hon Prime Minister probably with no reference to the latter part of the question. 
Rt Hon JOHN KEY 
: I cannot speak for the Television New Zealand board but I am finding it reasonably hard to believe that Television New Zealand entered a commercial agreement with Skycity to sell land that it owned and it did so without its board knowing. If that happened then maybe its board process needs to be improved and maybe the mixed-ownership model would work for it. But contrary to what the member says we have no plans to sell it or enter it into the mixed-ownership process.