Disquiet from Dunne?

March 8th, 2013 at 11:00 am by David Farrar

 blogged:

This government prides itself on a business like approach to issues. It likes to cut through quickly and resolve issues before they get too bogged down in red tape. For many New Zealanders, this pragmatism is welcome, coming after years of stultification and wariness under successive previous governments.

A lot of this change is due to the attitude and style of the Prime Minister, who is focused on achieving things and making a difference. In general, it is an approach which has worked well and probably explains in part at least why the government remains so popular in its fifth year in office.

But, as a couple of recent examples show, there is a danger that the cut through which has been one of the government’s hallmarks will become a major problem for it.

Take the case of the Convention Centre proposal. There is no doubt Auckland needs a world class convention centre, and that in all probability, is arguably in the best position to develop such a facility. No problem with that, subject, of course, to the specifics of the deal stacking up. But as the Auditor-General’s report shows, while there has been no impropriety in the process followed by the government, it did play very fast and loose at times.

Similarly, with movies. No-one seriously opposed making the movies here, and the government would have been roundly criticised if let the opportunity slip through its fingers, but as the various documents recently released show, the government’s enthusiasm for the movies being made here did get in the way of the facts from time to time as deals were struck to ensure the right outcome.

There is a time-bomb warning to the government here. Support for the cut through approach will wither if it is seen to be a standard proxy for bending the rules or doing special deals to achieve the desired outcome. While the government is not immediately vulnerable on this issue, the clock has started ticking.

I think at the heart of what Dunne is saying, is that Governments should not be seen to be picking out individual companies to do “deals” with. There is a difference between measures which favour a specific sector such as relaxing RMA rules, making mining easier, tax rebates for films – and “deals” with specific companies.

In the two cases cited, there were unusual circumstances for both, which won’t generally apply across the board.

The Hobbit “deal” was basically triggered by the malign acts of an Australian union official who was trying to blackmail the production through an international boycott. The union represented almost no actual New Zealanders and was trying to muscle its way in. If MEAA had never triggered a global boycott, then the crisis that caused the deal would never have eventuated. It was an own goal. But the key point, is that it was forced on the Government. And in the end the agreement they came to with Warners did not apply just for that production or that company.

The proposed (not yet agreed) Sky City deal for some regulatory changes in return for building a $350 million convention centre is a deal with just one company. This is not ideal. But the reason it is that way is because we have a law that prohibits any further casinos in New Zealand – there is a monopoly in Auckland – Sky City. Hence there is only one company you can negotiate with if you want to negotiate regulatory changes in return for more investment. If I had my way I’d get rid of the silly ban on more casinos so we have multiple operators.

Anyway the point I think Peter Dunne was making is that these two cases should be exceptions, not the rule. And I agree with him.

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18 Responses to “Disquiet from Dunne?”

  1. Cato (1,095 comments) says:

    Let me sum it up for you: It is generally a bad idea for the State to get involved in picking winners and losers but, in this instance, they have already done that by regulating for a monopoly. Accordingly, any deal over a SkyCity Convention Centre doesn’t represent a new embrace of corporatism, but just the prudent management of a corporatist system that was already in existence.

    [DPF: Very nicely said. You can fill in for me when I'm on holiday next!]

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  2. The Scorned (719 comments) says:

    Isn’t the obvious lesson from all this that we have too many rules and regulations getting in the way of progress and prosperity? When even the Government finds its own rules a pain in the arse inconvience to buggering around in the economy it says maybe theres just too many and they are too retrictive and should be reduced.

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  3. Redbaiter (8,039 comments) says:

    “Anyway the point I think Peter Dunne was making is that these two cases should be exceptions, not the rule. And I agree with him.”

    I disagree.

    There should be no exceptions.

    If there are rules that inconvenience a certain commerical undertaking, then they should be adjusted to suit all businesses, or left alone.

    Governments “picking winners” is just socialistic crap, and the Nats need to leave it behind.

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  4. Fentex (909 comments) says:

    I don’t think Dunnes words need such parsing, he seems pretty clear when he says governments shouldn’t cut through rules to make deals.

    The most important thing a government can do is suppress corruption for it is a cancer that kills opportunity, destroys the freedom to compete and eats away at trust and investment.

    Sweetheart deals, secret negotiations, favoured friends, initiating negotiations that favour predecided options (such as the Sky City deal) are all corrupt practices that must be suppressed.

    The policies and practices that lead to healthy countries or twisted cronyist and tyrannical oligarchies are choices, not accidents and Dunne is right to warn about making the wrong choice between options that select between them.

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  5. Andrew M (46 comments) says:

    WRONG WRONG WRONG

    What Dunne is actually saying is “I’m currently sided with the blue team, however in the event of a red team government I’d like it known that my allegiences are not concrete”

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  6. In Vino Veritas (138 comments) says:

    Given that the Government has not “procured” a convention centre, why is their an issue with the process and procedure? Surely they would have had to have actually used taxpayer money to purchase something to have to have followed a process and\or procedure? Seems daft to me that Labour can bleat about it being unfair when Sky City have essentially elected to pay for a convention centre. The fact that the government has given concessions is another matter.
    In the instance of the Hobbit, whether or not the Government knew of the lifting of the ban is moot. They have given future certainty and that is just common sense, rather than any conspiracy theory as the loonies in Labour and the Greens would have you believe.

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  7. Cato (1,095 comments) says:

    AndrewM – I think you’re missing something out:

    “I’m currently sided with the blue team, however in the event of a red team government I’d like it known that my allegiences are not concrete – but what is concrete, is my absolute committment to ensuring that the all-important Minister for Revenue position is held by me in either event.”

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  8. RRM (9,670 comments) says:

    Anyway the point I think Peter Dunne was making is that these two cases should be exceptions, not the rule. And I agree with him.

    I disagree.

    (1) Building a world-class convention centre in Auckland should not need Govt intervention. If it’s warranted someone will build it.

    (2) Getting international organisations to come to New Zealand to do their projects instead of somewhere else is a matter of national importance. There needs to be more. Offer the movie studios tax incentives. Offer the oil companies tax incentives. (As long as there is a net benefit to NZ; there is no point buying the work.)
    It is excellent that we have an investment banker on the 9th floor who understands the importance of pursuing these opportunities.

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  9. campit (467 comments) says:

    There are other examples of back room deals. Infratil meeting with Steven Joyce so that Snapper could get back on the Auckland Integrated Fares program, despite earlier losing out through a transparent, auditable tender process is one of them. Who knows how many other deals there are. The Transmission Gully PPP could do with a good fisking.

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  10. Peter (1,674 comments) says:

    Sounds like a break for the “sensible” middle ground should the “sensible” middle ground, as perceived by the Ohariu electorate, be occupied by Labour at some point in the future, be that sensible or otherwise.

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  11. peterwn (3,216 comments) says:

    I wonder why he is rumbling while John Key is out of the country? Perhaps he wants a bit of publicity without upsetting John too much. Seema a ‘mice plays while cat (not Moonbeam) is away’ situation.

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  12. Dennis Horne (2,238 comments) says:

    Disquiet, eh. I prefer Dunne quiet. After his efforts to exonerate the Erebus crash pilots and explain a tax haven isn’t a tax haven if it obeys the law.

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  13. Monique Watson (1,062 comments) says:

    I think Peter is right on the Skycity – pretty much what RRM said. But with the Hobbit and the unions they were well within their rights. If some little shit wants to unionise a workforce that doesn’t want to be unionised then you gotta stamp that shit out. All they did was redefine the definition of a contractor and an employee for the sake of the industry.

    And Snapper bears more of a similarity to Novopay.

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  14. Viking2 (11,284 comments) says:

    If I had my way I’d get rid of the silly ban on more casinos so we have multiple operators.

    quite right.
    If it hadn’t been for the “wimin of Labour then we would have had better legislation or none at all.
    Chadwick fought tooth and nail to stop a casino in Rotorua because the maori’s might all spend their money there.
    Actually they just went into all the pokie shops and did exactly that and Rotorua, which with Queenstown, are the two Tourist towns in NZ., missed out on all the employment that would have been made available.

    Of course people like De Cleene then had a job until dead sitting on the Casino Authority.

    Get rid of the lot. Let the market earn its keep.

    We need more tourists.

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  15. Manolo (13,517 comments) says:

    An old tired body (with a funny hairdo) for sale in 2014? History repeats itself.

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  16. thedavincimode (6,591 comments) says:

    Don’t be so hard on yourself Manolo. And I’m disappointed to learn that you’re on the game.

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  17. SPC (5,473 comments) says:

    http://www.stuff.co.nz/dominion-post/comment/columnists/tracy-watkins/8401515/Acting-fast-and-loose-not-a-Dunne-deal

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  18. HC (152 comments) says:

    Dunne is just an opportune jerk, who now and then pretends he must raise his voice on some “issue”, but in essence he will not seriously challenge National or Key after all.

    Re public tendering and negotiating, there should NEVER be any exemptions from the rule of treating all fairly and equally, and by applying reasonable transparency.

    That did not happen with Sky City and possible competitors. The Warner Bros deal was clearly done anyway, with a law change after the unions in question had already agreed that they would not take any actions.

    So the government has been involved in too dodgy processes, and it is NOT good enough.

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