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Key rejects criticism of Sky City deal

Wednesday 20 Feb 2013 9:19 a.m.

By Dan Satherley, with additional reporting from NZN

John Key has defended the way the Government procured a convention centre deal with casino operator Sky City, saying it will be a "waste of time" to re-run the tender process.

Mr Key claimed yesterday the Government had been "totally vindicated" by the Auditor-General's report into the process, and this morning told Firstline there was "no ambiguity".

"This was a (sic) allegation made by the Green Party, supported by the Labour Party - they went off to the Auditor-General to make out the case that I had acted inappropriately, or my ministers had acted inappropriately, and they were found to be 100 percent incorrect."

The contract is going to Sky City and ministers are meeting to try and close the deal today after Assistant Auditor-General Phillipa Smith yesterday reported there were deficiencies but no "inappropriate considerations" influencing the process.

Mr Key said the report only highlighted "procedural issues" that came about as a result of the "off-the-shelf" way the deal was made.

"It's a non-standard procurement. Governments around the world are looking to different types of deals. It's not the same as going to buy a box of paperclips, where it's pretty simple.

"This is bespoken, off the shelf, so is all a bit different."

But Labour leader David Shearer called that an insult to the public's intelligence.

"The report has made stinging criticisms, including that Government officials worked closely with Sky City to help it put together a bid, and were conducting preliminary negotiations while palming off other bidders," he says.

"This is evidence Sky City was given unfair advantage."

The Green Party, which asked for the inquiry, says Mr Key is clinging to a single finding in the report to claim he's in the clear.

"He is ignoring the vast majority of the report which was highly damning of a flawed and unbalanced process," said co-leader Metiria Turei.

NZ First leader Winston Peters is suggesting people who gave evidence to the inquiry "clammed up" so the report wouldn't criticise the Government.

"This was a preferential deal offered to only one business – all the rest were shut out of the highly advantageous pokie deal, and that's why it's so sleazy," he said.

Thought Mr Key admits there may have been "minor procedural issues", he says the Auditor-General saw "no reason to stop the deal".

"She makes it pretty clear, look, there was no inappropriate behaviour from any minister and frankly, look, we're ready to go on and carry on with those negotiations."

The inquiry looked at the process the Ministry of Economic Development followed in 2010 when it chose Sky City to build the $350 million Auckland centre.

KEY ALLEGES LABOUR HYPOCRISY

Mr Key says Labour did "exactly the same deal" under Helen Clark, but according to a New Zealand Herald report published last year, the Government "played no role" in the deal.

In 2001, Sky City was allowed to install an extra 230 pokie machines and 12 gaming tables in exchange for a $37 million convention centre in Federal St. At the time, current Justice Minister Judith Collins was chair of the former Casino Control Authority, and allowed the deal to go ahead for its "substantial positive effect on tourism, employment and economic development".

In 2003 Labour introduced the Gambling Act, preventing the introduction of more gambling facilities. Only one submission was made against the 2001 deal, from the Problem Gambling Foundation.

'SINKING LID' STILL IN EFFECT

Mr Key says he wants to get the deal sorted as soon as possible, and rejected claims it was a reversal of the "sinking lid" policy to reduce the overall number of pokies in Auckland.

"This argument that well, there'll be more pokie machines as a result of it, there probably will be some more, but again let's put that in perspective: there were 24,000 pokie machines approximately back in 2002 when Labour were the Government. Today, under my Government, there's a lot less. It's about 16,000 or 17,000.

"Yes, this will slow the rate of decline down a little bit, but actually there will continue to be less pokie machines in the years to come under my Government. Look, in the end, if your only concern is pokie machines, under National there will be less."

3 News / NZN

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