26 Jun 2013

Cabinet papers warned of potential harm from SkyCity deal

10:12 pm on 26 June 2013

Newly released documents show the Government was warned its deal with SkyCity to build a international convention centre could increase problem gambling.

Steven Joyce.

Steven Joyce. Photo: RNZ

Cabinet papers released under the Official Information Act raise concerns about giving SkyCity more gaming machines under the deal.

The casino operator has agreed to build the $400 million centre, in return for Government concessions that include an extended licence, an extra 230 gaming machines and up to 60 gaming tables.

The Cabinet papers show the concessions have the potential to create more gambling harm, but say it's difficult to quantify the scale or consequences. However, they say those costs would be outweighed by the benefits to New Zealand in gaining an international convention centre.

Economic Development Minister Steven Joyce said on Wednesday it is right to proceed with the deal, despite the warnings and tempering social costs with economic benefits is a challenge.

"The judgement that Cabinet's made is that it is, on balance, the right thing to proceed with. But we've been very clear to make clear that the Cabinet colleagues are aware of both the economic benefits but also the potential social harm."

Mr Joyce won't say exactly when full details on the gambling harm of the deal will be released.

Transparency International has concerns

An international organisation that measures corruption has also expressed concern about the deal.

In an integrity report on New Zealand, Transparency International says it is concerned about the accountability of the project.

The organisation says the convention centre will, in effect, be financed by gamblers and their families but because it is a public facility it would be most transparently paid for by a combination of compulsory taxes or rates.

Not before time - Labour

The Labour Party says the papers make clear that the Sky City deal will lead to an increase in problem gambling. Leader David Shearer says the release of the information in the Cabinet papers is not before time.

"Finally what we have in a Cabinet paper is Steven Joyce fronting up to the fact that the gambling is going to cause significant harm to the community and it's all laid out there in black and white.

"They've chosen to ignore that, to go ahead with this dirty little deal, and I think that's very revealing."

Mr Shearer believes papers being withheld by the Government contain even more damning evidence about the risks.

Foundation wants all info released

The Problem Gambling Foundation says there is now no excuse for the Government to be withholding its full advice about the risks of the convention centre deal. Chief executive Graeme Ramsey wants the full advice released immediately.

"It's time that all the information was put on the table so that as New Zealanders we can look at this and say this is a good deal, or this is not a good deal, and I think we are well past the point where we should have that information out now."

Mr Ramsey says it's hard to see how commercial sensitivity is a factor when SkyCity has a monopoly in Auckland.