Government consideration of further corporate welfare hand-outs to SkyCity for its convention centre shows just how weak the original contract was, Labour’s Economic Development spokesperson David Clark says.
“Taxpayers will be appalled to hear that on top of the humiliating terms in the original deal, the Government is now looking to subsidise the casino operator for ongoing operating costs.
“Unfortunately further raids on the public purse are the predictable outcome of a casino deal signed by a government firmly positioned over a barrel of its own making.
“When John Key sat down to dinner with SkyCity executives in a process the Auditor-General described as neither ‘transparent or even handed’, his Government effectively handed them a blank taxpayer cheque.
“Once the Prime Minister had expended political capital arguing for the back-room corporate deal, he couldn’t go back.
“International comparisons at the time of the original deal suggested SkyCity had come up trumps, even before the 27-year gambling license extension was thrown in as a sweetener.
“SkyCity knew early on they had the Government cornered, forcing it to drop measures to protect against problem gambling and dump clauses in the original negotiating documents that would have allowed it to claw back lost GDP and tax revenue if the centre was not run properly.
“Ironically, if the centre turns into a complete flop, the Government reserved the right to claim the white elephant for itself.
“While the nature of the ongoing subsidy isn’t yet clear, watch for corporate hand-outs dressed up as interest-free loans, international conference advertising or tax-concessions.
“Steven Joyce has a nimble mind when it comes to corporate subsidies - just ask Warner Brothers, Tiwai, MediaWorks or Talent2 who gave us Novopay.
“The SkyCity casino deal is National’s albatross. That the Government keeps looking every-which-way to feed it from taxpayers’ pockets is beyond belief,” David Clark says.