Clark David: New Zealand International Convention Centre Bill — Second ReadingText is incorporated into the Bound VolumeClark David: New Zealand International Convention Centre Bill — Second Reading[Sitting date: 05 November 2013. Volume:694;Page:14357. Text is incorporated into the Bound Volume.]Dr DAVID CLARK (Labour—Dunedin North): This New Zealand International Convention Centre Bill is a terrible bill. It is a shambles. The Government has put itself in a terrible negotiating position and this is a bad deal for New Zealand taxpayers. That is what has come out of this shoddy—shoddy—negotiation that the Government has done. Many New Zealanders will think that having an international convention centre is a desirable thing and in fact it is. Few would disagree with the proposition that having a high-quality international convention centre is a good idea. Nobody disputes that. What people are disputing here in this Parliament quite rightly is that paying for it by problem gambling is the answer. It is not the answer. Paying for a convention centre with problem gambling is a terrible idea. New Zealanders know that and this Government knows that. That is what this Government knows. Well might those members opposite hang their heads as they are because they should be ashamed of this legislation. I see that the members in the backbenches are ashamed. They know—those low down on the list—that this legislation may well be a reason that they are not coming back into this Parliament at the next election.Steven Joyce’s own department the Ministry of Business Innovation and Employment estimated that 8000 New Zealanders would be affected by problem gambling by the fallout from these changes—8000 New Zealanders would be harmed. That is why Government members are getting noisy over there. They do not like the fact that officials giving fair free and frank advice have advised the Government that a huge amount of harm will come from this legislation.The net benefit of it according to the New Zealand Institute of Economic Research in its independent review is just 18 jobs—18 jobs. This is the Government’s big idea—18 jobs for New Zealanders and 8000 people harmed. It is atrocious—atrocious—legislation. The Government originally tried to sell this believe it or not as an economic development initiative. It is a mockery—it is a mockery. It makes a mockery of the term “economic development”. The benefits of the casino deal to New Zealand are marginal. The debate has shifted to problem gambling. That is rightly where it should be.Why is the deal so bad? Well the reason is that the Government put itself over a barrel in the negotiations. There was a lack of transparency in the process with the Prime Minister favouring one party having talks with one party—Hon Ruth Dyson: Was there a tender process?Dr DAVID CLARK: —and giving that party the inside word on how to put the bid through. Was there a tender process my colleague asks. Well there certainly was not a tender process as we would understand it to proceed normally in Government. There seemed to be one party that had the inside running on this from start to finish. Atransparent process would have seen competitive bidders. Taxpayers would have had a much better deal if this Government was not doing a shoddy deal with its mates. That is what has gone wrong here. That is what is most obviously wrong.Treasury has made it clear that it is not convinced by the cost-benefit analysis of this proposition. It says it has “strong concerns that private benefits to Skycity will exceed public benefits to New Zealanders.” That is pretty clear from Treasury. It is not mincing its words. It says that public gains are exceeded by private benefit. It says that “Public costs will only go to private gain”. They are pretty strong words. “Treasury is concerned that the Crown currently lacks adequate leverage in the negotiations.”—that is from another part of its report. It said that the Government really was not up to the task of negotiating and well it might say that. The business had all of the facts and figures. The Government case relied upon the information provided by Skycity. We needed an independent look at this but we did not get it. There was no independent transparent process for picking the winner from this tender. It was a shoddy deal done by a shoddy Government that is determined to do shoddy deal after shoddy deal after shoddy deal. This casino deal I am afraid is no different.The deal by Skycity was an extra 230 pokie machines and an extension on its licence until 2048 in return for building the convention centre. Even if you put the horrors of problem gambling to one side comparisons with overseas valuation of the gambling rights show that taxpayers have been short-changed. In Australia just across the Ditch the firms that run the pokie machines pay a huge amount for licence extensions. They pay a huge amount for monopoly rights to have gambling in the city and that could apply here. We have an effective monopoly operating right now in Auckland on these machines.Sudhir Kale Professor of Marketing at Bond University and a friend of Skycity Chief Executive Mr Morrison and who has worked as a consultant at casinos on five continents said that the deal was a clear win for Skycity. He said and these are his words: “He’s a friend but if you want to quote me you can say: ‘Morrison did an excellent job negotiating with authorities’.” The 27-year licence he calls the icing on the cake. He says the pokie machines will pay for the convention centre in 3 years. The licence extension is the icing on the cake. Skycity is a business. You can understand why Skycity has done things the way it has. It is laughing all the way to the bank but it is the taxpayers who are bearing the cost and the problem gamblers who will pay for this legislation who are really worse off. Treasury was spot on when it said that the public costs would flow to private gain once the centre is paid off.There may be worse to come—there may be worse to come. We know that the final negotiations on spending for the convention centre are set to happen next year. What else is happening next year? Well we believe there is an election scheduled for next year. We believe there is an election scheduled. If it does not happen sooner—if this Government with its shoddy deals does not bring itself to fall over before then—there is an election scheduled and Skycity will know that. In the agreement that the Government has signed there is a clause that allows it to shovel more money to Skycity if the convention centre looks likely to cost more than is currently projected. If there is a saving Skycity gets to save it. It gets to keep the extra money. It gets to pocket it. But if it looks like the convention centre is going to cost more than it is currently projected to the Government has left itself a clause to shovel more taxpayers’ money into it. It is basically an open cheque book. The negotiation will be a very one-sided one in election year when this Government embarrassed as it is at the lack of progress in many areas tries to ram this legislation through so that it has a glossy convention centre to show for its work.Well that is not going to be good for New Zealanders. Currently the centre is projected to cost $402 million and we will see whether or not it exceeds its budget. But Skycity has form on exceeding its budgets. I remind the House of the TV programmeUnder the Grill. The restaurant The Grill cost $4 million. It was supposed to be open for the 2011 Rugby World Cup. That project ran 25 percent over budget and 25 percent over time. That was when the incentives were lined up for Skycity to finish it on time and to finish it under budget. But right now the incentives are lined up to finish it over time and over budget at the taxpayers’ expense.This is a terrible deal. Treasury has pointed it out and the Deputy Auditor-General has also pointed it out. This Government has not been a confident negotiator. The Deputy Auditor-General pulled no punches describing the process for what it was: “we do not consider that the evaluation process was transparent or even-handed.” Those are the words of the Deputy Auditor-General. Treasury says it is bad value and the Deputy Auditor-General says it is not transparent or even-handed. This is a shoddy Government doing shoddy deals and it is at the expense of problem gamblers. It is at the expense of the New Zealand taxpayer.Those members opposite who are hanging their heads do so quite rightly. This will cost the Government because New Zealanders know that this is a bad deal for everybody. It is a bad deal all round. It is shoddy. I ask those members opposite to examine their consciences when it comes time to vote on this conscience issue and pull out now. Save your seats do the right thing and let us have a proper transparent process around this deal. Let us get a convention centre that is paid for the right way not paid for off the back of problem gamblers and not at the expense of decent proper process. This is a bad deal. There will be 8000 more New Zealanders harmed according to the Government’s own figures for just 18 more jobs. It is a shoddy shonky deal from this Government.