Q+A: Greg Boyed interviews Steven Joyce
Sunday April 22, 2012
Greg Boyed interviews
Steven Joyce
Joyce says government could
walk away from Sky City Convention Centre deal:
“We
could walk away from it. There’s no doubt about
that.”
“It’s quite possible that both parties
end up walking away and saying, ‘We can’t get what we
want’.”
Minister denies extra pokie machines
will increase problem gambling in New Zealand; says
there’s no cost in adding hundreds of extra gaming
machines:
GREG
Are you not adding to that [gambling] problem by allowing
another 350 to 500 machines in one spot?
MR
JOYCE No, I don’t
think you are necessarily at all…
On problem
gamblers: “There are some people who, for whatever reason,
have problems with gaming in the same way that some people
have problems with alcohol. You can’t change
that.”
Denies knowing how many extra pokie
machines Sky City want from the deal.
Won’t give
deadline for negotiations.
Joyce says National’s
not selling the law for a convention centre: “it’s
basically saying you’ll alter the law to enable economic
activity to take place”.
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STEVEN
JOYCE
Interviewed by GREG
BOYED
GREG
First of all, let’s talk about the nuts and bolts. Would
this deal have happened if the 350 to 500 pokie machines had
not been offered by the government to
SkyCity?
STEVEN JOYCE – Minister of Economic
Development
Well, the government hasn’t offered anything. SkyCity has
made some requests. The negotiations are going on. But the
reality is, if you just go back a couple of steps, when the
government decided that we would seek approaches from people
in terms of building a convention centre, it was made clear
to all parties at the time that we’d look at innovative
ways of financing the convention centre, because I think the
point’s well made that they don’t pay for themselves,
and SkyCity came up with a proposal which was the best
proposal of the five that were standing up
there.
GREG
And for that proposal to happen, the law – gaming law –
had to be changed?
MR
JOYCE Well, it is quite
tricky, because the casino regulations are very tightly
prescripted, so the reality is if you’re going to make any
changes of the type which is to increase the number of
gaming machines, you actually do have to have a legislative
change. That’s just the nature of that industry. It’s
different to other industries where those sorts of things
don’t
apply.
GREG
So – there is no other way of putting this – for the
price of a convention centre, $350 million, the government
has changed the gaming law. It’s sold the
law.
MR JOYCE The
government hasn’t changed anything. It’s not sold the
law. I mean, that’s Labour
Party...
GREG
How’s it not sold the law?
MR
JOYCE No, that’s Labour
Party spin. I’m sorry. Governments alter laws all the time
to encourage economic activity to take place. This whole
“sell the law” thing is a Labour Party spin and you
shouldn’t buy into
it.
GREG
But it’s not for an individual company they change the
law. They change the law for various reasons, but not
because there's $350 million worth of convention centre up
for offer.
MR
JOYCE I think the
difficulty, as I said, in this situation is that the New
Zealand casino law is quite strictly prescribed, and so you
actually have to alter either the legislation or regulations
in order to do that. But, I mean, to suggest there's some
sort of “shock, horror” probe is ludicrous. I mean, the
previous government, for example, set up the Large-Screen
Production Fund, which basically created tens of millions of
dollars for the movie industry in New
Zealand.
GREG
OK, let’s...
MR
JOYCE That’s a slightly
different approach, but nevertheless those sorts of
incentives are placed all the
time...
GREG
Let’s back this up.
MR
JOYCE ...to encourage
business to take place in New Zealand, and in terms of the
convention centre, we don’t have the ability to host
something like around 8300 conventions around the world –
international conventions – each year. We host about 30 of
them. It’s a very big opportunity for New Zealand.
That’s how we pay for
it.
GREG
Yes, but let’s just back this up. If you hadn’t said...
If you’d said to SkyCity, “No, we’re not going to
change the gaming law. You can’t have any extra pokie
machines. You’ve got 1600. That’s enough,” you
wouldn’t have a deal. Is that right?
MR
JOYCE There's no doubt
about that. I mean, at the end of the
day...
GREG
So you have sold the law.
MR
JOYCE No, it’s not
selling the law, Greg. I mean, it’s basically saying
you’ll alter the law to enable economic activity to take
place, and that’s
entirely...
GREG
How is this different from what happened with Warner
Brothers and the Hobbit movie and the employment law was
changed so we could ensure that would happen?
MR
JOYCE Well, I’m you
raised that, because the government is very focused on
ensuring that there's an opportunity for economic growth,
and if it hadn’t made the change to that law, then the
Hobbit movies would not be being made here today, and the
reality is we would not have an international convention
centre unless we’re prepared to alter some things. Now,
the difficulty with all this is for the Opposition, if I may
say so, because it is a very political argument, is that at
the end of the day the government’s said we’re going to
do a number of things to help the New Zealand economy grow,
and the opposition at this stage seems to be saying
they’re against all of them. They’re against intensive
agriculture. They’re against oil and gas. They’re
against a convention centre. They’re against foreign
investment in New Zealand. They’re against, frankly, even
the ultra-fast broadband, the way it was done. And so what
you’re seeing is an opposition that are saying on the one
hand, “Let’s have some more jobs,” but on the other
hand, “Let’s make sure that you can do nothing to
encourage those jobs to occur,” and frankly that’s just
naïve.
GREG
Let’s talk about cost. There were, I understand, five
offers that were tabled. This is the only one that was
considered to not cost New Zealanders. Is that
right?
MR JOYCE I
think that’s right. There's also other aspects to it as
well. For example, location. I mean, undoubtedly a CBD
location is very important. All the evidence internationally
is that you’ve got to have proximity to hotels. There was
a very good proposal out at Greenlane at the raceway, for
example, but it’s a long, long way from the CBD. It’s a
long way from the hotel stock. And so for those reasons,
that one is very difficult to make fly. It wasn’t just the
cost. It was a range of
things.
GREG
But cost is the main thing.
MR
JOYCE No, no, I’m just
telling you that cost is one of the
things.
GREG
Cost is an issue, though.
MR
JOYCE Yeah,
yeah.
GREG
Let’s talk some numbers here. Between 77% and 85% of
problem gamblers in New Zealand use pokie machines as their
main mode of gambling. 74,000 New Zealanders are problem
gamblers. Every new machine creates a new problem gambler.
Of that, five to 10 people are affected. Multiply that by
350 or 500 – do you not see that as a cost?
MR
JOYCE Well, no, I think...
I think... Well, firstly, there's a couple of assumptions
there that
necessarily...
GREG
Well, these are assumptions the Problem Gaming
Foundation’s made, so if they’re incorrect, then
they’re incorrect.
MR
JOYCE The interesting one
is that every new gaming machine creates more problems. Now,
the political opposition to this one’s quite interesting,
because on the one hand, they’re down at SkyCity trying to
say, “Well, there’s empty spaces there, so we don’t
need more poker machines.” On the other hand, they’re
saying every new poker machine brings in additional cost.
You can’t have it both ways. The reality is this: gaming
in New Zealand is well-established across a range of areas,
and most people cope with it very, very well. It’s the
same alcohol. It’s the same with, frankly, sugary foods.
But there are some people who, for whatever reason, have
problems with gaming in the same way that some people have
problems with alcohol. You can’t change
that.
GREG
Are you not adding to that problem by allowing another 350
to 500 machines in one spot?
MR
JOYCE No, I don’t think
you are necessarily at all, because you don’t know the
substitution effects from other forms of gaming, for
example,
for...
GREG
But this...
MR
JOYCE No, no,
no...
GREG
This is acknowledged as the problem – not Lotto, not horse
racing...
MR
JOYCE Well, I’m sorry,
but I
don’t...
GREG
It’s the big slice of the pie is pokie
machines.
MR
JOYCE No, I don’t think
that’s correct. Are you actually telling me there are no
problem gamblers involved with the racing
industry?
GREG
No, no, I’m not, but we know that 70% to
80%...
MR JOYCE
Well, that’s what you just
said.
GREG
No, we’re saying the majority is pokie machines, and
you’re now putting between 350 and 500 more in a spot
where there are already 1600.
MR
JOYCE Firstly, those
numbers are not necessarily correct at all, because the
negotiations are
on-going.
GREG
So what are the numbers?
MR
JOYCE Well, we don’t
know the numbers at this point. The negotiations are
proceeding with the officials at the Ministry of Economic
Development and their advisers. They will come back to me at
some point with a recommendation in terms of what the final
arrangement should be. I’ll then take it to my Cabinet
colleagues, and that’s the way that’s run, and any of
these numbers that are being promoted at the moment are
being promoted in the media by various groups, and that’s
fine. But just getting back to your point – the reality
is that there is some problem gambling occurring around New
Zealand. There are a range of gaming forms. Now,
interestingly, the Opposition are not saying, “Close down
casinos and close down gaming,” and if you actually had a
principled view on this, that’s what you would be doing,
They’re just saying, weirdly, that we have the perfect
number of gaming machines in New Zealand right now and that
they cause an appropriate level of harm. But if we increase
it at all, that would cause a massive increase in harm and
we shouldn’t sustain that as a country. Now, if you had
the courage of your convictions, if the Labour Party and the
Greens had the courage of their convictions, they’d be out
saying, “Close the casino down.” They’re not. Why not?
Because they know it supplies 3000 jobs for New Zealanders.
So what is the magic about the existing number of gaming
machines in New Zealand right
now?
GREG
So, what is the number, Minister? What is the
number?
MR JOYCE
What
number?
GREG
You know the number of NGO organisations that could come to
a convention centre. We all know the cost of what the
convention centre is. Surely the number of machines that are
going to be put at SkyCity as a result of this deal – you
must know. Is it more than 500?
MR
JOYCE No, we don’t know
the answer to that question at all at this
point,...
GREG
When will you know?
MR
JOYCE ...because it’s
subject to a negotiation, and again I’m not going to put a
timing on that. I learnt through the ultra-fast broadband. I
said at the outfront of that we would not be putting a
deadline on it. The reason you don’t put a deadline on it
is actually because it puts the government in a poor
position relative to the people they’re negotiating with.
They get negotiated up against a hard deadline, and we’re
not going down to that, because that wouldn’t be good for
New Zealand’s
case.
GREG
So, when are you going to have a number?
MR
JOYCE Well, as I say, we
may not even have a deal. I mean, the reality is we’re
talking about a negotiation. It’s quite possible that both
parties end up walking away and saying, “We can’t get
what we want.” That’s an entirely possible outcome of
this negotiation, so I think, again, look, it was a slow
news week last week. The Labour Party were jumping up and
down about something which, frankly, was announced in the
middle of June last year, prior to the election, and now
they’re suddenly deciding it’s a big issue, and I think
frankly it’s just playing
politics.
GREG
So you could walk away from this?
MR
JOYCE We could walk away
from it. There’s no doubt about
that.
GREG
What’s it going to take for SkyCity to walk away from
this?
MR JOYCE I
have no
idea.
GREG
What's their bottom line, their number?
MR
JOYCE I have no
idea.
GREG
Goldman Sachs has said for the convention centre to make
sense on paper – $350 million – it’s going to have to
be at least 350 machines.
MR
JOYCE Well, Goldman Sachs,
with the greatest respect, are merchant bankers, and as
I’ve known from my commercial background, merchant bankers
sometimes get it right and sometimes get absolutely the
wrong end of the stick, so I wouldn’t take too much by
that. They’re just commentators on this from outside the
arrangement. They have no more relevance than you or I
actually offering an opinion on what it is that we should
require.
GREG
What would it take for the government to back down, though?
This is not a popular decision.
MR
JOYCE It’s not a
back-down situation at all. The government is interested in
doing a negotiation and an arrangement which is fair to both
parties – fair to taxpayers and fair to SkyCity
shareholders. And if such a deal can be arranged, then
that’s something we’ll put before the Parliament. If it
can’t be done, we won’t be doing it. But it’s not a
case of a back-down. The government is determined to find
all sorts of opportunities to grow the New Zealand economy
faster and more strongly than previously. This is just one
of them We’re taking steps across a range – so in the
areas of foreign investment, in the areas of oil and gas
exploration and in the areas of intensifying agriculture.
The Opposition, the political opposition, is opposing all
these initiatives, and they’re saying one the one hand,
“Give us more jobs, but whatever you do, let’s just get
in a defensive crouch and not actually change anything to
allow jobs to
occur.”
GREG
Let’s talk about the political numbers. United Future are
still wavering on which way they feel about
this.
MR JOYCE
No, I don’t think that’s fair at all. I think both
United Future and ACT are saying that they’d like to
see...
GREG
Well, no, Peter Dunne’s not saying that yet.
MR
JOYCE ...the arrangement
before they make a
call.
GREG
Peter Dunne isn’t saying that, and we know the Maori
Party, the Mana Party, the Green Party and obviously Labour
are against this. You could just not have the
numbers.
MR JOYCE
Well, as I say, the reality is we’re all at the point
where we don’t have an arrangement to even discuss at this
point, so again that’s getting ahead of it. I think Peter
has quite rightly said that he wants to have a look at
whatever the arrangement is, and frankly so does John Banks,
and frankly so does the National Party, so let’s just see
what the arrangement is that we come to, if one can be
finalised, and we’ll put it in front of the parties
concerned and see who supports it. And it will be
interesting, because once again it’ll be a case of the
Opposition deciding either they’re going to be part of the
solution in terms of growing New Zealand more strongly, or
they’re going to be part of the problem in terms of
getting into a defensive crouch and saying, “We do not
want anything to do with real economic growth opportunities
in this
country.”
GREG
All right, Economic Development Minister Steven Joyce, thank
you.
ENDS