The Auckland convention centre deal

May 13th, 2013 at 8:29 am by David Farrar

Steven Joyce has announced a heads of agreement with for construction of an international convention centre for . The details are:

  • Construction cost $402 million
  • Capacity will be 3,500 delegates
  • Projected economic benefit is $90 million a year
  • Jobs estimated to be 1,000 during construction and 800 once up and running
  • An extra 33,000 delegates a year expected
  • Renewal of casino licence from 2021  to 2048
  • An additional 230 pokie machines and 40 gaming tables
  • Four new measures to deter problem gambling and money laundering
    • a predictive modelling tool that analyses data to identify players at risk of problem gambling
    • a voluntary pre-commitment system where players can elect to restrict the amount of time they play or the amount they spend
    • doubling the number of Host Responsibility specialists
    • introduction of player identification requirements when amounts over $500 are being put onto, or cashed from, TITO tickets

This reinforces to me what a tough negotiator Steven Joyce is, as groups were talking the agreement could be as many as 500 new pokie machines. The number, at 230, is identical to those granted to SkyCity under the previous Government in 2001 for the development of the existing, and much smaller, Auckland Convention Centre.

This agreement in principle was announced before the 2011 election has been fully transparent and the legislation to enable it will go through Parliament to be debated.

It is also worth noting that the number of pokie machines in New Zealand will continue to decrease overall, just at a slower rate.

1,000 new jobs and an international convention centre bringing in an extra 33,000 high spending tourists a year is a very good thing. I hope Parliament backs the deal.

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51 Responses to “The Auckland convention centre deal”

  1. Viking2 (11,471 comments) says:

    What took them sooooo long?

    Frightened of their own shadows.

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  2. edd (157 comments) says:

    Anything for a dollar a?

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  3. Cunningham (844 comments) says:

    All the people who say this will create more problem gamblers, how exactly will it do this? Are there vulnerable people lining up outside waiting to use the new pokies? They are not used to full capacity now so how will it create new problem gamblers?????? PLEASE EXPLAIN because I cannot see any merit in your argument. No one has outlined a reason because there isn’t really one that I can see. Surely it will simply be people using the convention centre who will gamble on these new pokies.

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  4. decanker (184 comments) says:

    It’s all about the licence really isn’t it? That’s extremely valuable BAU certainty.

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  5. Fox (206 comments) says:

    Well it certainly may have taken a while, but I think the most important thing is that, much to my own surprise, they actually got it done (I’m going to go out on a limb and assume Dunne will support it).

    Great news for Auckland, and for the economy in general.

    It’s so nice to see common sense prevail in the face of hysteric interest groups and media scare campaigns.

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  6. Morgy (172 comments) says:

    Congratulations to all parties. Excellent work Joyce and all involved on the government side. Although it won’t happen, but it will be nice to the MSM give 90% of the coverage to the benefits of this and only 10% to sound-bite grabbers from ‘rent-a-moan’.

    Great stuff. Now lets get building!! Time also to get some consents away to start mining.

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  7. BeaB (2,123 comments) says:

    Turei was on National Radio this morning frothing at the mouth at the dirty deal by that dastardly John Key. It is the beginning of the apocalypse according to her and will bring death and damnation to us all.

    But, amazingly, it would be perfectly okay if the taxpayer and Auckland ratepayer paid the cost!

    Fascinating ethics and typical of the Left to find more ways to swipe money from out of our pockets.

    Good for the John Key and Stephen Joyce – a great deal and a much needed asset for Auckland.

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  8. mikemikemikemike (325 comments) says:

    No mention of the softer visa conditions for wealthy gamblers to come into the country (or is this tied up in the money laundering condition)? – On the whole it can only be good for us surely? They might be getting more pokies, but no one is holding a gun to anyones heads and making them use them.

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  9. Cunningham (844 comments) says:

    From the Herald:

    “The 230 new pokie machines is the same number granted to SkyCity under the previous Government in 2001 for the development of the existing, and much smaller, Auckland Convention Centre.”

    So Labour did the same thing and they now whinge about it. Their hypocriscy knows no bounds.

    BTW I am still waiting for someone to explain exactly how thios will create problem gamblers per my previous post. Please I am genuinely interested.

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  10. Manolo (13,780 comments) says:

    Expect stiff opposition from the enemies of the country: Luddites, socialists, do-gooders and all sort of control-freaks.

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  11. sparky (235 comments) says:

    Congrats John Key/Steven Joyce National. Great news for NZ. The opposition don’t have any real reason to oppose the Convention Centre, there is a lot more pluses than minus’s.

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  12. dime (9,972 comments) says:

    Good stuff!!!

    Well done. The deal is win/win.

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  13. flipper (4,067 comments) says:

    The red melons and the dick head labour pricks have been carrying on for months about creating more jobs.

    So have the their TV slobs at One and Three (also, because they have no leadership, at Prime).

    Forget about the 800 on-going jobs. Forget about the 6.2% unemployment rate. In the view of some idiots, people who make “bad” choices on how they spend THEIR money are of paramount import.

    Why not abandon Parliament/Executive in favour of the bullshit single issue advocates.

    Well done, Key, Joyce et al!

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  14. OTGO (551 comments) says:

    Hopefully they will get a slot machine like this http://www.youtube.com/watch?v=VRMCowpvOhM
    Played it at the Sydney Casino last month. A lot of fun.

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  15. Mark (1,488 comments) says:

    This is a hugely effective deal for Skycity. DPF I wouldn’t get too excited about Joyce’s negotiating ability on this, that length of licence extension is a lock for SC and Joyce had the stacked hand.

    Overall good outcome all around even if the process was a bit dodgy.

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  16. Pete George (23,567 comments) says:

    (I’m going to go out on a limb and assume Dunne will support it)

    A reasonable bet, in the past he’s indicated he would support it if there were sufficient assurances on associated issues. And National would have made sure they had the numbers to get it through Parliament.

    I just asked him, his reaction:

    Yes, it is a pragmatic deal: assures Auckland gets its world class convention centre, and the number of pokie machines is at the lower end of the scale, which will continue to see the numbers of pokies across the country reduce.

    Pretty much as expected.

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  17. doggone7 (805 comments) says:

    Fox; “It’s so nice to see common sense prevail in the face of hysteric interest groups and media scare campaigns.”

    Hopefully there will continue to be those who are wary of the style of doing back room deals as in the Casino Convention Centre deal, who won’t be concerned about being labelled “hysteric interest groups.” There are some who want total open slather for a government to act without rules or regulation in the cause of getting things done and having their version of common sense prevail.

    Clearly there was skulduggery in this business. Had the same ways of operating been practised by H.Clark and her lot there would have been wailing from posters on here comparing her with Stalin or Mugabe. What’s happened is done and instead we have bizarre, hysterical comments like “Expect stiff opposition from the enemies of the country: Luddites, socialists, do-gooders and all sort of control-freaks.”

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  18. MT_Tinman (3,187 comments) says:

    Fox (133) Says:
    May 13th, 2013 at 9:45 am
    (I’m going to go out on a limb and assume Dunne will support it).

    That will, of course, depend on which way the political wind blows at the time.

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  19. Cunningham (844 comments) says:

    doggone7 (30) if the other bidders were prepared to offer a better deal then where have they been?? They know they cannot match the SkyCity one. Yes there were proabably a few things which could have been handled differently but the best option was chosen. And by the way where are Ross69, Toad, Hamnidav2 etc to answer my question? How will more pokie machines in this deal automitcally increase the number of gambling addicts?

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  20. Pete George (23,567 comments) says:

    MT_Tinman – your wind up ignores what has happened.

    As far as I know Dunne always supported “a world class convention centre” but had concerns over pokie numbers. A reasonable balance has been achieved. National were always going to do a deal he could back.

    Comments from Dunne recently in reaction to attacks on him for not backing Mana’s Feed the Kids bill confirms that he thinks the current wind from the left is foul.

    He hasn’t answered the question directly but I don’t see any way Dunne could support a Green influenced Government, and certainly not a Green dominated Government. And because Labour is lurching left I don’t see how he could support them. I certainly wouldn’t support UF supporting most current Green-Labour policies.

    United Future have some policies in common with Greens on environmental issues, but on economics they are on different planets – and Labour are currently orbiting the Green planet. Note that earth looks blue from a distance.

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  21. Manolo (13,780 comments) says:

    MT_Tinman, shame on you for your unwarranted attack on Dunne, a bastion of democracy.
    He’s a man not for sale, whose reputation towers above other politicians, whose achievements are countless, and whose ability to change colours will put a king chameleon to shame.

    Above all, he is a man of integrity. Does that sound sincere?

    In reality, Dunne is an accomplished political prostitute. We all know that, except one.

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  22. mikemikemikemike (325 comments) says:

    Hey, why do I get the thumbs down? :D Maybe its just me…

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  23. Skttrbrain (26 comments) says:

    @Cunningham

    Here’s a start for pointy-headed academic research (from Australia) into the relationship between accessibility and gambling harms. It incorporates a couple of NZ-based studies toward the back – but the headline is that, despite documented methodological issues around the complexity of accessibility:

    On the one hand, greater accessibility stimulates demand, with the result that
    some gamblers are exposed to risks that were originally muted or not present.

     On the other hand, a population that already includes problem gamblers will be
    typified by higher expenditure levels (chapter 4), encouraging greater supply of
    gaming machines in those areas. To the extent that this is the case, reducing
    accessibility in that area may result in greater utilisation of existing machines or
    shifts in the location of demand, without reducing harm.

    Obviously there’s plenty to dispute – but here’s the starting point you’re baying for.

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  24. Pete George (23,567 comments) says:

    @felixmarwick
    >blockquote>
    Greens threatening to legislate to overturn convention centre deal if they’re in the next Government
    I presume someone is keeping a list of all the economic sabotage Greens are promising if they get into Government with Labour.

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  25. Morgy (172 comments) says:

    “Greens threatening to legislate to overturn convention centre deal if they’re in the next Government”

    Oh PLEASE PLEASE take that to the media! Come on…..front and centre. Get your mugs on the TV and tell the world that you will over turn this deal. Man this opposition are a gift!!

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  26. Pete George (23,567 comments) says:

    And ‘Eddie’ confirms the thinking of Labour’s left is very Green tinted:

    National has shown that the law is for sale, it can be changed at a whim. Well, it can be changed back, too. SkyCity should know that what’s done can be undone.

    SkyCity might find all kinds of regulatory changes imposed on it that will see it wishing it had never poked its nose into the political sphere and cut a dirty deal.

    Ah, but they thought of that, eh? There’s a compensation clause in the deal between SkyCity and the Government. Well, that’s the thing about laws, they can over-write dodgy compensation clauses, too. Why would a future Green-Labour Government pay out taxpayers’ money to a gambling company in ‘compensation’ for overwriting a deal that they opposed?

    SkyCity should be aware that its cut a deal with National, not with future NZ governments for all time.

    I wouldn’t be buying shares in SkyCity just yet.

    http://thestandard.org.nz/whats-done-can-be-undone/

    I won’t be buying iPredict stock for a Labour-Green win next year just yet.

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  27. Cunningham (844 comments) says:

    Pete George it is bloody disgraceful. They show no respect at all towards business and the NZ economy. How can they possibly be so stupid? I hope people see through their policies next year otherwise NZ will suffer a blow that will take many years to recover from.

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  28. Pete George (23,567 comments) says:

    And Shearer is obviously against the deal, expressing his opposition pictorially:

    https://twitter.com/DavidShearerMP/status/333750888667676673/photo/1

    After a Labour Green government have bought back power SOEs and slashed dividends through the NZ Power monopoly they will heaps of money left over to build a convention themselves.

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  29. Kimble (4,440 comments) says:

    Skttrbrain, as its Australian, it probably refers to pokies in pubs and clubs and is about geographical availability, or how widely it is available. The pub in town gets a pokie machine, and the problem gambler has their fix. The impact of more pokies available at SkyCity or The Star in Sydney is probably less clear.

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  30. Kimble (4,440 comments) says:

    SkyCity should be aware that its cut a deal with National, not with future NZ governments for all time.

    The appropriate term here is regime uncertainty: http://wiki.mises.org/wiki/Regime_uncertainty

    More and more it looks as if NZ only has one or two grown-up political parties.

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  31. Skttrbrain (26 comments) says:

    @Kimble “Skttrbrain, as its Australian, it probably…”

    If you read it you would find that these disparities have been covered in the discussion, and the research has included New Zealand-based data, and still finds a correlation.

    I’m sure all these studies, despite being relatively new, were all taken into account when the policy to reduce the numbers of pokies was drafted, and surely (?) through the recent negotiations.

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  32. Pete George (23,567 comments) says:

    And Turei declares war on the convention centre::

    The Greens have declared war on the $400 million SkyCity Convention Centre deal.

    They are threatening to legislate to overturn the deal should they be in the next Government.

    And co-Leader Metiria Turei is going even further, saying steps could also be taken to prevent SkyCity getting compensation should the package be canned.

    “Every government is sovereign, every Parliament is sovereign, and could produce legislation that could change the law, that will take away their right to compensation.

    “That is the risk they run with this kind of dirty deal.

    Ms Turei says SkyCity been handed a list of concessions it could never have dreamed of getting.

    She claims it isn’t a free convention centre for Auckland, and believes it will be built on the misery and suffering of problem gambling.

    http://www.newstalkzb.co.nz/auckland/news/1149461831-greens-declare-war-on-skycity-convention-centre

    Greens and Labour are becoming toxic for business.

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  33. alloytoo (543 comments) says:

    The licence is the huge cherry in this deal, for both SKy city and the NZ public.

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  34. toad (3,674 comments) says:

    @Cunningham 9:35 am

    All the people who say this will create more problem gamblers, how exactly will it do this?

    Try reading this research, page 241:

    It is likely that both access and adaptation forces are at work simultaneously, with varying implications for policy. First, there is strong support from the present findings for the access thesis, with strong statistically meaningful relationships between an increase in problem gambling prevalence and increasing per capita density of EGMs, at an average increase of 0.8 problem gamblers for each new EGM. Further, there is no evidence of plateauing of prevalence with increasing density of EGMs, one of the predictions of the adaptation thesis. These findings indicate that policies related to restricting or reducing the density of EGMs are likely to play a significant role in containing or reducing gambling-related harms.

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  35. Kimble (4,440 comments) says:

    First, there is strong support from the present findings for the access thesis, with strong statistically meaningful relationships between an increase in problem gambling prevalence and increasing per capita density of EGMs, at an average increase of 0.8 problem gamblers for each new EGM.

    And the mechanism for this affect is?

    If a bank of machines always has 2 free, what is the mechanism by which the addition of 2 more will increase the number of problem gamblers?

    Without understanding that mechanism, there is no way to know whether banning the increase in numbers of pokie machines (effectively reducing the number of machines per person over time) would have a net positive or negative social impact.

    Otherwise you are left assuming only good outcomes from your policy, which makes your argument worthless, endorsement of the method by BERL notwithstanding.

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  36. Lance (2,655 comments) says:

    The Greens idiotic far left rantings are going to make election debating gold.
    Show us the money!

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  37. Billy (121 comments) says:

    Care to comment on this, DPF?:

    http://publicaddress.net/8583

    [DPF: Nothing to respond to. This Govt is just being upfront by having negotiated the deal itself, rather than using a quango to do so. Probably why they got a better deal]

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  38. Judith (8,534 comments) says:

    Access and availability are major aspects.

    There may currently be two machines ‘spare’ because the traffic flow is not sufficient, however, when you expose a greater number of people to the area, which is what will occur when the centre is functioning, then the greater number of machines will mean more people have use of them.

    Increase the number of machines + increase the number of people to the area = more problem gamblers. Its simple maths.

    Many people wont visit the centre to ‘intentionally’ use the pokie machines – which is why having them in an area which serves another purpose to bring large numbers of people into close proximity is an excellent idea for Sky (who couldn’t give a flying duck about the harm they cause to peoples lives). People with time to spare will wander to the pokie area, have a shot, lose a bit, have another go (to get back what they’ve lost), have a good win and from then on in there is a good chance that their lives will turn to shit.

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  39. Manolo (13,780 comments) says:

    Thank you for your profound morality lesson, Judith. Now leave me alone to live my life the way I want.
    Had you been born in Germany of the 30s you would’ve made a fine prison guard.

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  40. OTGO (551 comments) says:

    Someone said to me once, I think you’ve got a gambling problem”.

    I said, “you wanna bet”.

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  41. Kimble (4,440 comments) says:

    People with time to spare will wander to the pokie area…

    And how is that different to now? If an unrelated convention centre was built across the road, the number of people wandering in would be just the same. So in essence you are arguing against the convention centre.

    And you are ignoring the much greater likelihood that if someone is a problem gambler, they already know about pokies at Sky City. The marginal impact of the new machines is more likely to be that non-problem gamblers get to have a go (and leave with their life intact) without having to wait for a space to open as a problem gambler blasts through the last of their benefit money.

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  42. Russell Brown (405 comments) says:

    This agreement in principle was announced before the 2011 election has been fully transparent

    Bollocks it has. As John Armstrong has noted today, the most important (not to mention extraordinary) part of the deal — the 35-year licence extension, which commits the next 11 governments to compensating SkyCity for any regulatory change — was not mentioned at all prior to the recent resumption of negotiations. It has not been transparent in the slightest. The fact that it emerges from a deeply compromised tendering process in which the winning party was given knowledge not available to others just makes the whole thing even more tawdry.

    I accept the economic arguments for a large conference centre — no problem there. But this has been particularly grubby way of getting there. You might be happy with governments behaving like this. I’m not. As Armstrong said in the wake of the Deputy Auditor General’s report, it’s the stuff of banana republics.

    And the “Labour did it too” spin isn’t true either:

    http://publicaddress.net/hardnews/spincity/

    But I expect you know that.

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  43. Morgy (172 comments) says:

    “As Armstrong said in the wake of the Deputy Auditor General’s report, it’s the stuff of banana republics.”

    Bollocks it is. It’s getting the job done. Simple.

    Key does do it differently, I grant you that, but it is about the big picture. I far rather that than a constant stream of why things can’t be done.

    Great job I say.

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  44. Russell Brown (405 comments) says:

    Bollocks it is. It’s getting the job done. Simple

    I suggest you might feel differently if you were one of the other companies that tendered. But if you’re happy for a future centre-left government to stitch up deals over dinner with its own favourites, then fair enough, I guess.

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  45. Morgy (172 comments) says:

    That’s just emotive spin Russell. Simply put, there were no others who could do what SC could; Build and run it for free. I get it though that the ‘normal’ process may have tied some of the procurement lovers in knots but Key and Joyce have the ability to sit down and cut through the shit to get a deal done. There was no ‘dirty’ games played, no one hiding in the shadows passing out envelopes etc….just business how business is done…through relationships, discussion and then detail.

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  46. Russell Brown (405 comments) says:

    That’s just emotive spin Russell. Simply put, there were no others who could do what SC could; Build and run it for free.

    None of them even knew that was the government’s position. Again, I look forward to your cheerleading when a government you don’t like does the same thing — and tries to bind its successors from any regulatory change for the next 35 years.

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  47. Silly Will Bunions (143 comments) says:

    Nonsense, Judith.

    Every potential adult problem pokie addict is already a problem pokie addict.

    Remember ‘supply and demand’ is demand driven, not supply driven. So doubling the supply of alcohol in the country will not produce more alcoholics – it will just lead to alcohol warehouse stockpiles. And doubling the importation of cigarettes would not produce any more smokers – again it would just produce stockpiles of cigarettes at wholesalers.

    Add one more poker machine or 1,000 more machines at SkyCity, the machines will not seek out anyone who has not already been lured.

    That said, the above cannot be said of the number of locations. More pokie outlets would have a detrimental effect. The Key government is in the business of reducing the number of outlets – good.

    [I speak from experience.]

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  48. Viking2 (11,471 comments) says:

    Russell Brown (401) Says:
    May 13th, 2013 at 5:58 pm

    That’s just emotive spin Russell. Simply put, there were no others who could do what SC could; Build and run it for free.

    None of them even knew that was the government’s position. Again, I look forward to your cheerleading when a government you don’t like does the same thing — and tries to bind its successors from any regulatory change for the next 35 years.

    =====================

    hmm, well Mr Brown we could start by pointing out that the evil witch and her shreiking haradan removed our right to access the Privy Council without so much as a moments consultation nor without asking the inhabitabts of this democratic country if it was what we wanted.
    And that change (agreement with themselves) lasts longer than 35 years and has far greater implications than a commercial agreement between two parties.

    And of course we can always find more e.g. the closing down of the West Coast timber Processors by that nasty peice of shit from Dunedin and the corrupt decision of Cullen to buy back a broken arsed company for $400 million or the WWF bribe or the Free Student Loans.
    Not one of those actions is overshadowed by a simple commercial agreement that creates jobs in Auckland in a job starved world.

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  49. Steve (North Shore) (4,563 comments) says:

    Well if it creates jobs to build something that takes money from stupid people then I am all for it.
    But then it is only our money that we get back

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  50. Kimble (4,440 comments) says:

    and tries to bind its successors from any regulatory change for the next 35 years.

    And in response, Labour and the Green immediately show all other businesses why such a clause may have been necessary.

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  51. doggone7 (805 comments) says:

    Morgy said: “Key does do it differently, I grant you that, but it is about the big picture. I far rather that than a constant stream of why things can’t be done.”

    Go to this list and use their name instead of Key. They saw the big picture too. They got things done. In New Zealand there used to be accepted ways and protocols of operating which ensured we did not have the characteristics of the behaviour of those in the list. Mr Key indeed does it differently. http://www.filibustercartoons.com/monsters.htm

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