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)