Herald column on Sky deal

April 20th, 2012 at 12:16 pm by David Farrar

My Herald column is on the proposed deal. One extract:

I suspect the political acceptability of any agreement will come down to how many extra machines are agreed to. If for example, the agreement was for 10 extra machines, no one would get too worked up. As no agreement has yet been reached we don’t know what number will be agreed upon. The Opposition claim it could be up to 500.

While 500 sounds a lot, it would increase the number of pokies in NZ by just 2.8 per cent, from 18000 to 18,500. The total number of pokies would still be 6,720 less than the peak of 25,221 in June 2003.

In National’s first term the number of pokie machines declined from 19,739 to 18,001 – a decline of 1,738. An increase of 500 at Sky City would still see the total level significantly lower than in 2008.

The number of pokie machines over time can be viewed at this webpageof the Department of Internal Affairs.

My conclusion:

Most voters react on instinct. They react to whether or not they think Sky City is a good or a bad company. Hence why opposition politicians are now accusing it of everything from money laundering to causing child abuse. If Sky City is successfully portrayed as a “bad” company, then any agreement with it on a convention centre will politically damage the Government.

Ironically the greater the political pressure on the Government, the stronger their negotiating strength with Sky City is. They can point to all the criticism of the proposed agreement, and use that to negotiate the numbers downwards. If at the end of the day, the agreed number of extra pokie machines is quite modest, then the Opposition will deserve some of the credit.

The negotiations have been ongoing for nine months. I suspect they will be completed soon.

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16 Responses to “Herald column on Sky deal”

  1. Nick R (507 comments) says:

    Heh. Somehow I doubt the PM will be thanking the opposition for making this into a political hot potato!

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  2. trout (937 comments) says:

    It seems to me that the practical solution would be to buy up the rights to 500 machines in South Auckland or wherever else they are concentrated as a quid pro quo. Maybe cost up to 10 mill.

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  3. Yvette (2,781 comments) says:

    The negotiations have been ongoing for nine months.

    Why is Labour unable to tell us what profit Sky City makes from the average pokie machine that it is worth the company spending $ 350 million on a convention centre [and admittedly have some return on that investment] with the aim of securing a proposed 500 extra machines?

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  4. tvb (4,364 comments) says:

    Yes I am attracted to the idea of eliminating poker machines as well. BUT many of these machines are in small bars and clubs and prop them up.

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  5. BeaB (2,118 comments) says:

    Isn’t it sad when the small pleasures of the lower classes (booze, gambling, fags) attract the opprobrium of the censorious middle class.

    Chardonnay OK, Jim Beam not. Weed OK. nicotine not. Lotto OK, pokies not.

    What a silly lot we Kiwis are, always keen as mustard to cut off our noses to spite our face. And even keener to cut off someone else’s nose.

    As someone wisely said, when are we going to get out of our own way?

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  6. V (701 comments) says:

    “Ironically the greater the political pressure on the Government, the stronger their negotiating strength with Sky City is. They can point to all the criticism of the proposed agreement, and use that to negotiate the numbers downwards”

    Doesn’t sound right to me. Sky City would just say we won’t build a convention centre and taxpayers would end up shelling out for it.

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  7. V (701 comments) says:

    @BeaB
    Well said.

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  8. backster (2,152 comments) says:

    What has not be discussed is whether Labour see the need for a convention centre and if so who they think should pay for it, and manage it.. Who is their tourism spokeman, and why haven’t the ‘Herald’ and other mischief makers posed these questions.

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  9. flipper (3,985 comments) says:

    Backster has made an excellent point.

    Two questions remain unanswered:

    1) Do we need, or will we benefit from, a National Convention Cerntre in Auckland?
    and
    2) Who should pay for the centre? ( No BS and prevarication, please)

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  10. Akaroa (552 comments) says:

    BeaB at 3.19. Hear hear! You took the words right out of my mouth.

    For me, if people want to go and shove coin after coin into a slot machine until there are no coins left – then that’s their business. There are too many people around today who are trying to live other people’s lives for them.

    As my old Dad used to put it: “Everyone’s entitled to go to hell in whatever way they choose.”

    Crude comment maybe, but IMHO a valid point nevertheless.

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  11. Morgy (172 comments) says:

    And as expected, more of the same blinded and ill-informed comments on the Herald website. Christ we are a sad nation. Another opportunity will ultimately be pushed aside by a myopic minority.

    Anyone who has been to international trade fairs for example will know how vibrant they are in terms of what happens after hours let alone the huge money spent in the event itself.

    I am sure most of these people who cite ‘corruption’ would have no idea of the scale this opportunity presents!

    BTW, pokies at Sky City are the least of the worries….Sure there are a percentage of those addicts who would drive to the city but (without really knowing) I bet the vast majority where the problems exist are the ones that go to ‘Acme Sports Bar’ around the corner.

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  12. Nookin (3,282 comments) says:

    Just in case anyone is interested, here is a link to the original study.

    http://www.google.co.nz/url?sa=t&rct=j&q=national%20convention%20centre%20%20feasibility%20study%20in%20august%202009.%20&source=web&cd=7&ved=0CEgQFjAG&url=http%3A%2F%2Fwww.med.govt.nz%2Fsectors-industries%2Fcities%2Fpdf-docs-library%2FInternational%2520Convention%2520and%2520Exhibition%2520Centre%2520Feasibility%2520Study%2520summary.pdf&ei=3veQT5SPMsG1iQfIqOCLBA&usg=AFQjCNGSjkaAbl8EqKEna3r1J1OXfQuXBg&cad=rja

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  13. trout (937 comments) says:

    As a merchant town Auckland absolutely needs a convention centre (certainly more than a rugby stadium) because it is a business generator. Look how Queenstown benefits from conventions ( albeit more the lightweight tax deductible variety). And congratulations to John Key for taking the initiative and ignoring the tainted propositions that were looking to Government to fund their enterprise (as they did with the rugby stadium proposals).

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  14. Fox (206 comments) says:

    Just build the damn Convention Centre already.

    Surely National has figured out by now, that no matter what attempt it makes to progress this country, it is always going to be subjected to the incessant bleating of the Left.

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  15. Morgy (172 comments) says:

    JK killed Campbell tonight!

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  16. Gremlin (1 comment) says:

    Why does the government needed at all to build this convention centre? If there is, as we are told, a heavy demand from many wealthy people, then why can’t SkyCity just raise the funds from a bank and build the convention centre?

    Or, why can’t the government just build the convention centre and use the receipts from the convention guests to pay the bill?

    This isn’t a school or an air force or a hospital we’re talking about, it’s a convention centre – the guests pay for the convention centre – that’s how it works.

    I don’t understand why the government needs $350 million from SkyCity, or why SkyCity needs poker machines to build a casino that’s supposed to bring in the cash.

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