PM Key defends govt support for Sky City convention centre, says can't expect shareholders to invest for 6 years without certainty

PM Key defends govt support for Sky City convention centre, says can't expect shareholders to invest for 6 years without certainty

By Alex Tarrant

Prime Minister John Key says he approached SkyCity about a year ago in his capacity as Minister of Tourism about building a convention centre in Auckland.

At his post-cabinet press conference in Wellington on Monday afternoon, Key said of all the options he considered for the potential building of the centre, SkyCity seemed the best choice as it already had facilities in place such as hotel rooms and restaurants

Key spent the morning defending the government's decision to give support to SkyCity for the construction of a NZ$350 million convention centre in Auckland, saying the company's investors could not be expected to invest without certainty the project would go ahead.

SkyCity proposed over the weekend to build a convention centre by 2015 on land in central Auckland, although it has asked the government to make changes to gambling regulations, such as extending SkyCity's casino licence past 2021 and allowing it to provide more gaming machines for customers.

The announcement comes the same weekend as it emerged the country's largest purpose-build convention centre in Christchurch is likely to be demolished due to damage sustained in the February 22 earthquake that hit the city.

Speaking on TV One's Breakfast programme this morning, Key said he did not think a precedent was being set that law changes would be made for big business if enough money was involved.

“We want to be in a regime where we can make sure there’s good business activity and where we grow Auckland and we grow the country," Key said.

“In this particular case, we do want SkyCity to invest NZ$350 million. It’s going to create 1,000 jobs while that construction is underway, and 800 permanent jobs, and bring about 100,000 high-value visitor nights a year," he said.

“We think Auckland needs a convention centre. Government and the rate payers don’t want to put in money, SkyCity’s licence actually expires in 2021 and this facility wouldn’t be finished until 2015, so you can’t expect their shareholders to invest for six years without certainty of their investment.”

“We need to put up a case to make sure that it is viable, because we want them not only to build it, but to run it,” Key said.

“I don’t think it’s a matter of thanking them, it’s a matter of being logical. We are sitting there saying, ‘look, their licence expires in 2021, we know that it will be extended' – well that’s almost a probablility.”

There might likely be more gaming machines as a result of government concessions to Sky City, Key said.

“That’s largely targeted at the international market, and that helps, overall, make the transaction work, because without that it’s unlikely that just the convention centre would support a NZ$350 million investment,” he said.

“That’s who they’re really looking to grow [international visitors]. It’s not getting more people from South Auckland, it’s getting more people from Guangzhou is what they’re interested in," Key said on RadioLive this morning.

The government was constantly changing laws to facilitate economic development or make changes in other parts of society, Key said, citing recent changes to aquaculture and fishing laws.

Not yet a done-deal

Meanwhile, Key told Newstalk ZB's Mike Hosking the agreement was not yet a done-deal, with the two parties now going to undertake negotiations.

“But I hope it becomes a done-deal, because having an international convention centre for Auckland, if you want Auckland to compete with Sydney and Melbourne and the likes, it is really important. It will make Auckland a much more interesting place, support a lot more business and jobs, I think it’s a good thing,” Key said.

On RadioLive this morning, Key told presenter Marcus Lush he was not aware whether or not Sky City donated to the National Party.

'You do this, but won't save KiwiRail jobs'

Labour Party internal affairs spokesman Chris Hipkins said the government needed to stop being dictated to by multi-national corporations and start putting the best interests of New Zealanders ahead of corporate profits.

“News that SkyCity has decided to invest in a new International Convention Centre in Auckland is great news for the economy, locally and nationally. But that doesn’t mean we should rush out and change our laws and regulations to suit the interests of SkyCity’s shareholders,” Hipkins said.

“When Warner Brothers held a gun to National’s head, John Key rolled over and changed our employment laws to suit their whims. Now we’re seeing him roll over and offer to change our gambling laws to suit SkyCity. That’s not good enough. The National government should be guided by what is in the best interests of all New Zealanders, not what’s in the best interests of corporate giants," he said.

“It’s ironic that National aren’t willing to back New Zealand companies like KiwiRail, preferring to see contracts for new trains and carriages shipped offshore, but when one of the private sector big corporates clicks their fingers it seems there isn’t anything John Key won’t do to please them.

“New Zealand has a legislative moratorium on new casinos and increased opportunities for gambling. National said before the election they had no plans to change that. It now looks like that’s yet another promise that wasn’t worth the paper it was written on,” Hipkins said.

'KiwiRail issue is different'

Key said it was not right for Labour to claim criteria for SkyCity were not applied in the KiwiRail Dunedin decision.

“That’s 40 jobs in Hillside, and they were jobs that were geared up because we actually did favour Hillside in terms of the building of some wagons. We’re not building the locomotives there because we’ve never built locomotives in New Zealand, so we’re getting to the original numbers," Key said on RadioLive.

“Of course I’d love it if those 40 jobs could have stayed there, but we’re also interested in turning KiwiRail around. That’s a company that’s supporting 4,200 jobs. If we want KiwiRail to be a successful company, we have to let the management get on and run that company without tying their hands behind their back," he said.

“In the end if you don’t do that, the business won’t turn around and what will really be at risk is the 4,200 jobs. And I think they’ll create more jobs over time, KiwiRail, if they do their job properly and turn into a successful company.”

(Updates with Key comments from postcab presser, Labour comments, Key KiwiRail comments)

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So we now see the man's true colours.  Pour money into business; to hell if it goes off shore we can just borrow. But always look after the big Investors. The people, well who cares about the people certainly not our John Boy.  He will just lower the minimum wage or ban it altogether.

Patricia , its becuase of idiots like you with such simplixtic views  that we are a low wage backwater economy . Here we have someone in the form of Skycity ( I Listed on the NZX , so its substantially owned by Kiwi's) who is willing and able to invest a huge sum in NZ in the form of building infrastructure .

The Government cannot afford such a development , its almost broke  . They , Sky city , need to know they will be able to grow their business and get a return before hocking itself to the hilt . Its a trade -off, plain and simple .

We also have 160,000 people receiving welfare , as a % of our total population , thats among the highest in the OECD, and as a % of our working population , thats a huge number.... and unsustainable. We need any jobs we can get here .

That anyone cannot see the benefits for all New Zealanders is just ludicrous.  

 Beatman - you are sailing to nowhere.

 “NZ- Key Culture” - NZconsumerism before NZproduction ?

 It seems for PM Key and his ministers every other business (Auckland Casino/ NZ$/ Re- election/ etc.)  is much more important then full employment in decent jobs of the wider NZpopulation.

Considering his priorities does the PM really recognise the severity of the problems in our economy/ society ?

PM - what are the social consequences and the indirect costs for taxpayers of the Auckland Casino ?

 PM - how many more broken families – how many more prisons – how much more burden for the taxpayer ?

More here:

 What real productivity, creating decent jobs means – PM.

One example:

The Federal government's aim is to safeguard valuable jobs for the future and to create new ones.  

We are currently providing funding for nearly 200 projects worth a total of 100 million euros.,did=363990.html?view=renderPrint


Here in NZ billions of taxpayers money is exported for imports by the government or wasted with stupid projects.




Jeez Patricia...that's a cracka idea...ban wages altogether...make people work for the joy of it...the pleasure to be had from sharing tasks with others with a common goal to make me wealthier...thanks Pat....I think you should post that idea to JK....

On a more serious note...can you tell us all why the Cuban family dictatorship Govt  is moving to allow some very minor examples of "capitalism" to creep into their fabulously successful commie economy....

 Wolly – I ask you again, where are the 170’000 decent jobs coming from to have positive results for our economy ?

I am sure he has thought of it!!  Why do we have to be an extreme anything.  New Zealand has an extreme system of capitalism and Cuba is at the extreme of the other end.  Why can't we manage our capitalist economy so that everyone benefits.  It is because of our economic structure that people aren't working.  It is because of our economic structure that our country is in the doldrums. It is because of our economic structure that our exporters can't export.  It is because of our economic structure that we have so much crime.  If you get the economic structure right then the people benefit and then business prospers and then the Country prospers.   But it has to be in that order.  People. Business. Country.


Dear Mr Key,

I choose to work and pay taxes in your country.  You are responsible for allocating the funds (taxes) I give you.  I beg you - if you are going to invest my funds please do so with wisdom, into sound enterprises that will make NZ more wealthy and help pay off those big debts that someone else obviously racked up due to their financial incompetence.  You know the companies i mean, the type of companies that sell stuff to other countries, then re-invest and spend their profits here in NZ. 

After you've used my funds wisely in this fashion, if there is enough left, I would be happy for you to invest in less productive service-related industries that might create jobs (ala stuff like a convention centre).  After all, as you know, when people have jobs (those $13 to $25 per hour type jobs), they can just afford those big screen tellys and the electrical stores can stay open just that little bit longer.  And of course we all know that if those stores stay open and make lots of sales everyone will think you're doing a great job and you'll probably get re-elected.  Nice.



Mr Key will spend our tax dollars on whatever it is that will secure himself a better future.

By "himself", I mean Mr Key personally.

Not you.

Not me.

Not anyone else, except perhaps his business and political cronies.

But definitely not you or me.

Mr Key doesn't give a toss about anyone but Mr Key and anyone who can hand Mr Key more goodies for Mr Key.

So forget about appealing to his sense of Patriotic Duty, because - like all politicians and big business types - his self-interest leaves no room for anything else.

(Many will label the above as "cynicism", but only because they are too afraid to face the fact that it's actually cold, hard, bitter "reality".)

I tend to agree with you but it doesn't pay to be cynical - it gets nobody anywhere.

Someone needs to step up to the plate and sort this out by making the right decisions for NZ.  I'd do it if I was allowed but I'm not NZ born and not a citizen. 

Who, other than me, will challenge this JK decision to pump our tax money (or our borrowed money from overseas or wherever) in the wrong direction yet have the masses think he's doing the right thing.  It's bloody criminal NZ...wake up and don't just think she'll be right - because quite clearly, all us here on this site know "she won't be right"

 There's no way we should be changing any laws to suit Sky City or any other corporation, NZ 'owned' or not. And we certainly shouldn't be investing taxpayer's money into any PPP scheme that National and their party members dreams up.

Unless John Boy isn't going to use tax dollars but borrow funds offshore instead. After all, another billion here or there in foreign debt couldn't hurt could it...

Taking a big picture view; why would anyone spend $350m on an event centre that won't come online until 2015 when, by 2015, most of the countries and corporations that could support this type of enterprise will bankrupt. And with the cost of oil and jet fuel probably doubling by 2015 who would want to spend more on traveling to a convention away down here in NZ than on the total cost of the convention.  

SkyCity shares up nearly 2% this morning.

Is this adventure capitalism?

Does JK have shares in Sky City?

Will he remember if he does?

Oh but then it is a blind trust.

Surely when we have much healthier socially ,growth exporters in need of support, we should be spending time and energy there,not on feeding the face of gambling.

Would a PM's mindset be that it's more important to create jobs (those $13 an hour type ones) than to increase NZ's wealth? 

Seems so.  If he was serious about bringing more $ into NZ and improving our standard of living he'd surely stimulate mining and exporting before stimulating a service industry?  There's always talk about mining more, but it's just 'talk'.  No action.

Quite frankly, it seems to me we are doomed to be in a massive debt hole for decades, or forever.  Can our debt ever be paid off?  Not with current actions like this convention centre investment.

Hendie you hit the nail on the head..Our tax dollars are all gobbled up paying beneficiaries, census workers and pothole fixers - those productive members of our society.  The borrowed dollars (which are created out of thin air anyways) are the ones spent on the convention centre - then the overseas lenders get to own the convention centre one day when we default on payment of the loans.  And if we're too proud to default on the loan (likely scenario), we extend it's term and stop paying the beneficiaries, census workers and pothole fixers. 

Our citizens revolt "then" because their standard of living plummets, instead of "now".  Safe PM now, unsafe PM down the track.  We should actually revolt "now" if we care for our kids.  But will we?  After all, JK is such a lovely fella with a lovely smile, all the old ladies love him, and he must be intelligent because he's so rich.  Do we let sleeping dogs lie?

This is appalling - what a butt ugly building.

Looks like a pile left over bits from the early 90's overlayed with a bit of maori twee.

I don't care about what deals or support the government gives it as long as it's a DECENT BUILDING.

Big aftershock just hot canterbury really big

there dust coming up from CBD...reports liquifaction...people are out of buildings on street again...not good again

Yep, there was a 4.3 at 12:30pm 10kms from Oxford where I am which felt pretty strong, and then this new one at 1pm also felt strongly here. Hubby is in Chch today (Riccarton) and txted to say he was OK but it sounded big. I hope everybody is OK.

Seems it was a 5.5 10kms east of Chch. When is this going to end?

5.5 out where Feb one was ans shallow...a bit of damage in Eastern suburbs again not good CBD as well

Lucky we borrowed all that extra loot! Our economy is going to absolutely screaming, repairing all this continuing damage and destruction. ( turns off sarcasm tag)

Excuse to borrow some more now.  Hell why not just triple the borrowings?  It's worthless paper reducing in value by the day anyway!

Hope everyones OK in Christchurch, these continuing quakes must be really starting to get to the folk down there.

Re this so called convention centre. Why do Sky City want the casino rules changed? I thought it was supposed to be for exhibitions and conferances. Is John Key stupid?

reports are a lot of damage out east again.......nerves have had enough of this..people leaving work going home they have had enough ..some schools are closing and will need to re look at the buildings......this will put the whole re build on hold again....growth wont be as quick as they think..not when mother nature dictates everything.

Think Big Mark II anyone? I would pay to see the painful looks on your faces when you all vote for him in November! (and you will...)

Key is somewhat ill-informed. Hillside did indeed manufacture - from scratch - locomotives. When I was an apprentice there, the old fellows who'd done it were my instructors.

Re Chch - where are the whingers again? The comparers with Japan?

There's often a real reason for these governance calls. Sure, there are some like the Sky City one, that are pure hokum, but the precautionary-science ones are always good policy.

Oh - silly me. I forgot - it's all to do with the Median Multiple         :)

SO Marlarky,


They are looking very smug.


OMG, this one was huge, I'm shaking. Just ordered husband home after he'd decided to stay put in Chch after the 1pm one. This one was so long, actually saw the concrete floor of the house moving in a wave (that's Oxford), went on forever. Just a minute after the local school txtd that all was OK and running till 3pm as normal. I'm off to get the kids.

We felt that one here in Kaikoura.  - massive - not good !

Updated with Key saying he approached SkyCity a year ago about the convention centre...

About the same time he gave up looking at more productive asset enhancing income producing projects like mining and manufacturing.

The claim that the proposed convention centre combined with increased gaming facilities would supposedly attract the rich Chinese is rubbish. Why would they come here when they could go to either Macau (world's gaming capital) which is a part of China 's territory or Singapore which is set to overtake Las Vegas as the world's second-largest gambling hub this year.

Increasing the gaming machines and extending the gaming licence does not guarantee that the convention centre will do well.

What happens if the convention centre is closed after a couple of years or the operations are scaled down? Does it mean that the gaming machines would be reduced and the gaming licence shortened?

Is creating 800 new low paid jobs where people have to wear flea collars to work the path to greatness? #dumbgrowth

These people will have to commute for hours and pay more than they can afford for housing in Auckland.

I'm still stunned that John Key actually approached Sky City to cook up this deal.

He just can't shake his investment banker deal making instincts. The trouble is it's our money and our future he's doing deals with.

Meanwhile, he just let 40 high paid and highly skilled jobs in Dunedin, where housing is relatively cheap and there aren't the same constraints on infrastructure, go to buy some (slightly) cheaper Chinese imported trains.



I'm still stunned that John Key actually approached Sky City to cook up this deal.

Agreed. Sounds like we are back to government picking winners.

I thought this was a good column from Rod Oram in the SST this week on NZ's commodity exports and the comparison between our relationship with Britain 100 years ago and China today -

Surely some high value jobs could be created in this sector Mr Key?