Malone on Sky City deal

July 28th, 2013 at 9:00 am by David Farrar

Dr is a former Cabinet Officer staffer and a public law commentator. He writes in the Dom Post on the Sky City deal:

Can the SkyCity agreement, and the resulting legislation, be considered a breach of our unwritten constitution? The argument of constitutional impropriety rests on three pillars. None are very persuasive.

The first is that the legislation will benefit just one person, in this case SkyCity. This, it is argued, is offensive to the rule of law because legislation should be of general application to everyone.

This is certainly true of criminal laws passed by Parliament. Here we are all equal before the law. Yet outside of this area, Parliament regularly makes laws that benefit a single individual or group. Private bills by their very definition change the law for the benefit of a particular person or company.

Similarly, local bills relate to specific regions. Parliament gave Wanganui District Council the power to ban gang patches in parts of the town. Not all local authorities were given this power – just Wanganui District Council.

Perhaps more importantly, government bills are commonly passed that benefit one individual or industry group to the exclusion of others. Thus, individual iwi receive compensation packages through statutes that implement Treaty of Waitangi settlements with the Crown.

So that is the first point dealt with.

The second argument as to why the deal is unconstitutional is that by amending the Gambling Act in exchange for building the convention centre, the Government is “selling” a dispensation from the Gambling Act. …

But what is clear is that parties in government always face difficult tradeoffs when making big policy decisions. In this case the National Government – still facing challenging economic conditions – considers that the pros of having a privately funded national convention centre outweigh the cons. Not everyone will agree with that assessment, and they will have the opportunity to express their views at the next election. But hard policy choices do not automatically equate with governments running roughshod over our constitution. …

It also changed the Overseas Investment Act regulations to ward off the Canadian Pension Board’s takeover bid for Auckland Airport. The fact that many people opposed those decisions did not make the resulting laws unconstitutional. They were simply political decisions taken by the government of the day. The Government’s deal with SkyCity is no different.

And the third point:

The third reason why the deal is supposedly unconstitutional is that it “binds” a future government. Under the terms of the agreement, SkyCity is entitled to compensation if key parts of it are overturned. But it is not unusual for governments to have their hands tied by earlier decisions of Cabinet or Parliament.

For example, the current Government must pay Tainui and Ngai Tahu additional settlement money because of relativity clauses inserted in legislation passed by Parliament in the 1990s. In any event, it will always remain open for a future Parliament to revoke the deal and specifically rule out compensation to SkyCity.

Our Parliament is free to enact laws that remove rights without compensation and has done so in the past. The Government’s agreement with SkyCity is not contrary to New Zealand’s constitutional system. Fundamentally it is a political issue, not a legal one.

And one announced prior to the last election.

For a different view, there is this opinion from Stephen Franks.

7 Responses to “Malone on Sky City deal”

  1. Gerrit (105 comments) says:

    Is an unwritten constitution, constitutional?

    Contradiction in terms surely.

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  2. peterwn (4,286 comments) says:

    Gerrit – UK has managed without a written constitution for over 1000 years. NZ and Israel also get by OK without a written constitution. These are the only three nations on Earth without a written constitution. No one has ever said that these nations are illegal (apart from specisl matters relating to Israel), and the UN recognises these nations despite absence of written constitutions. At the end of the day it is the judiciary, armed forces and police who uphold the unwritten constitution.

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  3. Simon (1,604 comments) says:

    No the real problems will occur when the Labour / Greens get into power and use Key’s crooked dealings with Sky as a reason for their own deal making.

    The Green crack pots are threatening the Green jobs revolution on NZ which will pave the way for NZ style Solyndras. Cunnliffe has said Labour will also back various “business winners” in select areas.

    The leftards will start spending tax dollars on businesses based on ideology they will point to Key and say he set the precedent.

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  4. Gerrit (105 comments) says:


    Where can I find out what is in the unwritten constitution? Who decides what is contained within its boundaries?

    Not arguing their legality, just the question, how can they be illegal or legal if they are unwritten?

    Or are we talking about precedents? Surely the unwritten constitutions you refer to are nothing more than acceptable bounds of behaviour, But whose bounds and who judges?

    If we look at this definition

    It is generally the result of historical development. It is never made by a representative constituent assembly at a definite stage of history, nor is it promulgated on a particular date. It is, therefore, sometimes called an evolved or cumulative constitution. The constitution of England is a classical example of an unwritten con­stitution. It is mainly the result of historical growth.

    Then any changes to perceived unwritten constitutions can be considered “cumulative growth” and totally acceptable.

    So yes, the government can enter into a commercial arrangement, just as any following government can negate that arrangement. After due process off course.

    it simply becomes part of the new “unwritten constitution”.

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  5. publicwatchdog (5,630 comments) says:

    What about the increased risk of money-laundering?

    Is the Sky City deal effectively setting up a Sky City ‘money-laundering’ factory, right in the heart of Auckland City?

    (More on this later…..)

    Penny Bright

    ‘Anti-corruption/anti=privatisation’ campaigner

    2013 Auckland Mayoral candidate

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  6. Reid (21,429 comments) says:

    Then any changes to perceived unwritten constitutions can be considered “cumulative growth” and totally acceptable.

    There’s a whole field called Constitutional Law which considers this Gerrit. The field is dictated by conventions, such as the convention that the GG on the Queen’s behalf always signs the law presented by the govt of the day, even if the GG thinks it stinks. Now and then something happens where they don’t follow the conventions and a constitutional crisis arises. Such a crisis arose when the GG fired the Whitlam govt in Aus. It’s those times and those times alone where a written constitution is handy, but even then you have interpretation issues, which is what the US SC spends most of its time dealing with. So not having one does not make it mean anything one wants it to mean, as you suggest.

    And even if it is written, if you incorporate something vague like “the principles of the treaty” into it, what the heck does that mean? So a written form does not solve all problems, not by a long shot.

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  7. Fentex (3,318 comments) says:

    I agree with the arguments that dismiss the first two positions, but the third is not dismissed. I don’t think it’s quite correct to call the 35 year promise against regulation unconstitutional so much as it’s dishonest. Because…

    In any event, it will always remain open for a future Parliament to revoke the deal and specifically rule out compensation to SkyCity.

    It’s a promise no government can make and therefore should not for to do so is negotiating in bad faith.

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