The Prime Minister has signalled the Government might not sign a deal with SkyCity to build a new convention centre until the Auditor-General's Office has finished its investigation into the matter.
John Key said on Thursday the National-led Government would be "pretty cautious" about signing such a deal, appearing to contradict Economic Development Minister Steven Joyce who said on Wednesday an agreement could go ahead regardless of the inquiry.
The proposal involves SkyCity constructing a $350 million convention centre in central Auckland in return for an expansion to its casino operation, including more gaming machines.
Deputy Auditor-General Phillippa Smith will investigate the tender process, including how proposals to build the convention centre were sought and dealt with. It will also look at the adequacy of the assessment of the likely costs and benefits for each proposal.
On Wednesday, Mr Joyce, the lead minister on the negotiations, said he was very confident that the inquiry would find no wrongdoing and if a deal was on the table the Government would sign it.
This prompted criticism from Opposition parties, who said it showed a disregard for the role of the Auditor-General.
John Key maintained on Thursday that the Government respects the investigation.
"No, I don't see any reason why we can't continue the negotiations. I mean, obviously we'd be pretty cautious about signing a deal. But as I said yesterday, we welcome it. The expression of interest process was run fully by MED (Ministry of Economic Development). My office wasn't even involved in that."
When asked again whether the Government would sign a deal while an investigation was under way, Mr Key repeated that it would be "very cautious" about doing that.
Joyce questioned in House
During Parliament's Question Time on Thursday, Green Party co-leader Metiria Turei asked Steven Joyce whether he stood by his statement that he was not at all concerned about signing a deal with SkyCity before the Auditor-General's inquiry was completed, given the Prime Minister's comments.
Mr Joyce replied he stood by his comments, and there was no contradiction with what Mr Key had said.
"I'm well aware the Prime Minister said he'd be cautious and I look back at my transcript yesterday and I said I was pretty cautious as well, and pointed out there's a whole bunch of things that have to occur and we'll just step our way quietly through it. I can't quite see the distinction the member tries to make."
The Labour Party says Mr Joyce's comments on Wednesday shows arrogance and a disregard for the Office of the Auditor-General. The Government rejects that, saying it is not acting with arrogance over the SkyCity deal, but rather with confidence that the inquiry will find that due process has been followed.
Radio New Zealand's parliamentary chief reporter says the Auditor-General does not have the power to stop activities or contracts, cannot direct a public entity to act on its findings, nor can it make a binding decision about the legality of actions.
The Government says Labour did a deal with SkyCity in 2004 for a $140 million investment for the upgrade of the existing convention centre in return for an extra 240 gaming machines.