As good as it gets?
Finance Minister Bill English released the Budget Policy Statement and the Half Year Economic and Fiscal Update this week confirming we are through the worst of the GFC. Treasury forecast an average growth rate of 2.6% over the next five years. They characterise this as relatively strong. However, it is significantly lower than forecast growth in a protein hungry Asia which accounts for about 44% of our trade and slightly less than Australia whose growth may, or may not, stay on forecast. Of course some of New Zealand’s growth results from the re-build in Canterbury.
Interestingly, Treasury note the strong increase in net permanent migration to New Zealand (17,500 in the year to October), half of which is from Australia and two-thirds of that, returning New Zealanders. This may be a good reason to stop advocating for an extension of Australian welfare entitlements to New Zealanders as all our Prime Ministers ritually do.
The size of government is set to grow
Mr English confirmed that Budget 2014 will achieve a forecast surplus $86million which is paper thin compared to a NZ$72 billion spend, but it’s a surplus nonetheless. Revenue is rolling in while expenditure is constrained. Net core Crown debt peaks at 26.6% of GDP and drops to a 22.3% by 2017/18 largely due to the improvements in the cash position. Revenue in 2013 was NZ$61.1 billion and is set to hit NZ$84.9 billion in 2017/18. Core Crown expenses in the same period start at NZ$70.3 billion and hits NZ$79billion in 2017/18. Treasury say we can expect a surplus of NZ$5.6 billion at the end of the forecast period assuming ongoing spending restraint.
Houston we have a revenue problem
Treasury say that tax revenue is due to grow by about 5.8% p.a. over the forecast period. They correctly identify the risk of a change in emphasis away from expenditure restraint. Nominal increases in core Crown expenses are driven by social programmes: social welfare benefits (the biggest of which is super and it accounts for most of the increased spend), health and education. From an ACT perspective an expansion of poor quality social spending could start under either a National led government in its last term or an incoming Labour-led government in 2017.
Election 2014 – giving some back or more tax and spend
With more than a third more revenue forecast in 2017/18 than in 2012 the big question for election year is whose narrative wins. The conventional wisdom is that an improving economy helps the incumbent Government. This is likely true, however improving finances will also lead to political demands for more spending.
Already the child poverty ‘industry’ is in high gear essentially advocating more welfare and trying to make their issue and election issue. Labour will probably run on the gap between rich and poor, (inequality) and echo their UK counterparts. This they will do, all the while ignoring the drivers of upward social mobility, which are not about more welfare programmes, but about better educational achievement.
National’s narrative is steady-as-she-goes and is about good economic stewardship. Will National make even the gentlest philosophical argument about taking less in revenue from taxpayers when it conflicts with the repayment of debt line? We know they will not undertake to address the future cost of superannuation. They have done some reform in welfare and education and nothing particularly substantial in health, although Tony Ryall will almost singlehandedly ensure that health is not an election issue.
Making the case for slimming the State in 2014
The best way to keep on pressure to restrain spending is to focus on public debt repayment and limiting new spending which makes politicians and bureaucrats consider value for money and the quality existing programmes. But spending self-control won’t be enough. History is against a record of on-going restraint, politicians and bureaucrats are simply not incentivised for it. Touchingly, Treasury have confidence that today’s politicians are keen to prepare the books for the GFC#2 sometime in the future. Returning some revenue to the New Zealanders who generate that wealth in the first place is the only sure-fire way to slim government over the longer run and generate a higher rate of economic growth.
Traditionally, making the early case for tax cuts falls to ACT. In 2002 we campaigned on tax cuts. By 2005 both Dr Brash and Dr Cullen were too. In 2008 National campaigned on tax cuts, implemented the first tranche and ditched the rest of the programme because of the GFC.
As New Zealand moves into the post GFC economy, the real world arguments about whether the New Zealand State should aspire to do so much for so many citizens, who could probably make better arrangements for themselves with more of their own money, will and should return.
RT will return on 10 January 2014. We wish everyone a Happy and Safe Christmas and a prosperous New Year.
Avalanche of bad news and the adjournment
As the American writer and wit Mark Twain observed, no man’s life, liberty or property is safe while Congress is in session. This week, the Parliament wrapped up business for the year with most MPs returning to their electorates and regions.
December is also traditionally the month where Ministers release bad news. Ministers bearing bad news are like the wildebeest of the Serengeti in migration - there is safety in numbers when pressing towards Christmas. This is the time when the public are too pre-occupied to be further outraged. And most journalists are filled with the stories of year and working up their end of year retrospective pieces. An added advantage this year has been the death of the iconic Nelson Mandela and the speculation as to whether Mr Minto was more deserving of a place in the Prime Minister’s party to South Africa.
The major event in the Parliamentary calendar (aside from the Press Gallery party) is the adjournment. It is generally a light-hearted debate where MPs do ritual battle and all in sundry are generously thanked. You can see John Banks’ stout defence of both himself and the Partnership Schools in Whangaruru and Whangarei, both of which are being targeted by the nasty PPTA.
Yet another failed IT project
In the pre-Christmas avalanche of bad news was a gem of a story about the New Zealand digital archives project being... well... shelved. The hapless Minister of Internal Affairs, Chris Tremain admitted that he had put the project on hold in February and that, thus far after a spend of $7.4 million, it had not been money well spent. While Labour’s Grant Robinson appeared in the story, what was much more interesting was that it took him 10 months to latch on to it. Any government information technology project should be worth an official information request on a monthly basis from any decent Opposition politician.
A chorus of woe and the ComCom
Finance Minister Bill English announced a kicking-of-the-tires review of the Commerce Commission in the wake of the final determination of the wholesale price of copper over Chorus’ copper wires. As yet the terms of reference for this review and who will actually be doing it is not clear.
The Broadband decision is not the only cause for complaint; another is the effect ComCom speculation (in a press release) about regulating the pay-tv market. This speculation had an immediate impact shareholder value in SkyTV. A further compliant is the effect of regulatory decisions on electricity line companies, particularly those with publicly listed shares and are therefore subject to market disciplines. The general argument goes that the ComCom is not concerned enough about shareholder value and investor confidence in the regulated industries.
This latest announcement is not the only piece of work underway in the regulatory space. Mr English’s review of the ComCom could compliment a wider piece of work commissioned by the Minister of Finance and the then Minister of Regulatory Reform, John Banks from the Productivity Commission on New Zealand’s regulatory systems.
The argument that partially privatised government power companies still face political risk isn’t new – the Opposition parties have been in overdrive to generate this very uncertainty all year. Likewise, argument about the risk to fully privatised ex-state industries that attract further meddling from Ministers. Recently Dr Bryce Wilkinson has helpfully outlined the sorry tale of government meddling in the telecommunications industry for the NZ Initiative.
It is not immediately clear whether Mr English’s kicking-of-the-ComCom-tires will add to, or subtract from the perception of meddling politicians and bureaucrats.
Momentum seeps out of referendum campaign
News that the turnout in the referendum against partial asset sales has reached just over 40 per cent will be disheartening for Labour and the Greens. Turnout figures and the preliminaries show a very minor uptick in the turnout in the last day but the momentum has clearly gone out of the campaign. They won’t hit a 50 per cent (or more) response rate. This citizens initiated referendum was always more about building momentum and political infrastructure than it was about the issue.
RT knew the turnout would be low when we saw the first Electoral Commission advertisements. Being lectured at by an orange stickman doesn’t build interest in the issue nor confidence that it matters.
Of interest will be how the media writes up the result. With almost one third of respondents approving the sale and just over two-thirds against this is a Labour and Greens fail. In fact they got less votes against than National won in favour in the 2011 general election. The story should be about how the campaign lost steam despite large injections of taxpayer money and paid party activists. After all that is what the campaigning Labour/Greens MPs are. The best explanation of a turnout of less than half of all eligible voters is that most New Zealanders had worked out that it was a stunt – it simply didn’t matter to them.
It’s also doubtful whether either Labour or the Greens built much campaign infrastructure from the exercise. Many a leftwing activist will end the year tired and somewhat flat. In politics as in life, one should not mistake activity for productivity.
Partnership Schools are on the way
Tomorrow (details here) is the opportunity for Aucklanders to hear Nick Hyde who is the CEO of the Vanguard Military School one of the five new Partnership Schools championed by ACT. Nick and his family have a proven track record of leadership in the education sector with running the Advanced Training Centre’s Military Prep School. You can read about the other successful Partnership Schools | Kura Hourua announced by John Banks and Hekia Parata here.
Getting the public policy right around expanding school choice and empowering the parents of some of our most vulnerable students is only half the battle. ACT’s own Catherine Isaac played a major role in making sure that New Zealand got world leading policy. Best evidence also shows that great schools require great school leaders. Come along a join us at the Auckland North Regional Forum tomorrow if you can– you will be inspired.
Goosing CCCP polling; Labour tanks the economy grows
For the past fortnight the Nats have been talking up Colin Craig’s Conservative Party (CCCP) in an attempt to goose his polling numbers with the journalists joining in. For the journalists, Craig has all the potential of being New Zealand’s version of Australia’s Clive Palmer. That makes for great copy if your beat is politics. It also sets up a nice pattern. As Mr Craig makes up policy on the trot; is it a bottomline? If so, how does Mr Key respond?
The real take-out of the polls has been missed. Labour’s leadership change hasn’t worked. What is also becoming clear is that while Mr Cunliffe is bright, he is also lazy. He isn’t on top of his material in Parliament. It also comes across in his glibness; what sounds profound on first hearing does stack up on closer inspection. The more Labour MPs profess to be energized, fired up and good to go the more unhappy many look. Rodney Hide has a thesis that Labour is still more pre-occupied with itself than the country, despite the best efforts of Mr Cunliffe.
Out of the GFC shadow
Poll numbers are not the only numbers that matter in politics. Those around economic fundamentals also matter. The post GFC economy is emerging. Economic growth is up to 2.7 per cent to the year to June and likely to hit over 3.5 per cent in election year – the ANZ Bank says they see a potential for economic growth at over 4 per cent. Unemployment is down, inflation, current account deficit, and 90 day Bank Bills interest rates are all up consistent with real economic growth. With a growing sense of economic security those voters that Mr Cunliffe needs to win are not the stay-at-homes but those that swing between Labour and the Nats; they are less likely to shift away from Mr Key in an election about economic credibility.
Fast followers now out on a limb?
This week Australian Prime Minister Tony Abbott introduced his Bill to repeal the carbon tax with Federal Treasurer Joe Hockey introducing an accompanying measure to repeal the mining tax. While the Bills have to get through the Australian Senate, these taxes are dead.
It places New Zealand in a tricky position with our Emissions Trading Scheme (ETS). The purpose of our ETS was to ensure that we were seen to do our bit to reduce carbon emissions even if in fact the ETS didn’t actually reduce emissions. Officials freely conceded that any drop in New Zealand’s emissions would make no difference to the climate anyway. No, what mattered was we were seen to be doing our bit. New Zealand was to be a fast follower not a world leader. With the moves in Australia, New Zealand is not only a world leader with our ETS we are out on a limb. Only Europe has an ETS and it is nowhere near as broad or as ambitious as our one. What is more there won’t be ETS or a carbon tax in the US or Canada any time soon. Surely being a fast follower now means dumping the ETS?
Emotional intelligence bypass of the week
This one goes to Russel Norman Co-Leader (and real leader) of the Greens and his contribution to Parliament on Typhoon Haiyan. The purpose of the motion was to express New Zealand’s sympathy to the Government and peoples of the Philippines. Instead, Dr Norman made it about domestic politics and about the Greens by reading a long highly emotional statement from a Philippines delegate at a global warming conference in Warsaw. Most in the Parliament thought it crass. You can see John Banks statement on the Typhoon here and you can make a donation to the Red Cross here.
Standing your ground award of the week
This one goes to ACT’s own Gareth Veale who has an unshakable confidence in his city of Christchurch and his Party. ACT is a great campaigning party; we will be taking our message to the people of Christchurch East in the by election and to the wider city.
Auckland North Regional Forum, Takapuna Yacht Club, 39 The Strand, Takapuna, Saturday, November 16, 1.30pm - 4pm, Cost: $10. Hosted by Beth Houlbrooke. Speakers include Dr Jamie Whyte, Nick Hyde, and Professor Robert MacCulloch.
To RSVP, you may register online here. Alternatively, you may contact Beth.Houlbrooke@act.org.nz and direct credit your fees into the 'ACT NZ Auckland North Region' Bank Account 01-0121-0120885-00, putting your name in the particulars.
- Canterbury Regional Forum, Saturday 23 November, 2.30 - 4.30pm Cotswold Hotel, Papanui Rd, Christchurch.
Primary industries Minister Nathan Guy cannot continue to ignore the damning claims of bullying, secrecy and unacceptable behaviour from concerned growers who are forced by the Government to supply their produce to monopoly exporter Zespri, ACT New Zealand Associate Primary industries Spokesman Robin Grieve said today.
“ACT has been calling on the Government to initiate an independent inquiry into Zespri’s activities after it was convicted of smuggling in China. ACT now wants the inquiry broadened to look into concerns expressed by growers about the lack of transparency and intimidation by Zespri,” Mr Grieve said.
“A One News story over the weekend revealed the growing discontent among growers concerned with Zespri’s behaviour. A number of growers were too afraid to appear on camera but told One News they are so appalled with Zespri’s conduct they would no longer deal with Zespri if they had the choice.
“Zespri Board candidate, Tom Wilson, confirmed their claims saying people are ‘reluctant to stand up and voice their genuine concerns’ as the ‘Zespri PR network can destroy people’. He says Zespri’s culture is arrogant, self-serving and needs to change.
“ACT opposes monopolies - especially government mandated ones - because they generally become bloated, inefficient, and lazy. ACT believes it is Zespri’s monopoly status and lack of proper oversight that has caused the current problems. They are a monopoly out of control.
"It’s time for the Minister to listen and take action by launching an independent inquiry.
“The inquiry currently being undertaken by New Zealand Kiwifruit Growers Incorporated is not independent and therefore the validity of any findings is compromised.
“Growers need an assurance that they are doing business with a reputable company. At the moment there is no way they can find out. Growers who question Zespri appear to be stonewalled and faced with intimidation if they speak out.
“The Government is responsible for how the kiwifruit industry is set up. It is the Government’s responsibility to get to the bottom of this issue,” Mr Grieve said.
I love liberty.
And we all enjoy the benefits of it. As it turns out, whether or not you have a job, you can still pay for all the basics even if you do find yourself struggling. And because of liberty, life is more than what you can do from your wallet: in New Zealand you have the freedom to be yourself (sometimes with the requisite courage), the freedom to decide what you want from life, and how you go about your relationships.
Liberty is behind this standard of living. How so? Well, if weren’t for all of us going about our daily business of earning more money than we spend, meeting our obligations and making choices about employment, education, health, recreation and how to live (or think) and being free to do these things then the provision of a $23.6 billion welfare state, a $12.4 billion education system, and a $15 billion health system would be impossible.
There’s always room for improvement. Though, it is a situation in which Flight of the Conchords not only pay for the benefits of society, but also helps form a society where being as goofy as them is a career path.
But here’s the crunch; everyone’s about liberty. So how do we know they mean it? Here’s a way to catch out the ones who will achieve only the opposite: those whose underlying (and usually hidden) premise contains the idea of undeserved entitlement.
It is, briefly, an entitlement that goes beyond your rights, and expands into someone else’s. And it’s also the resting pulse of big government. Thomas Jefferson (the famous President) once warned that a government big enough to give you everything, was also big enough to take it away.
That kind of entitlement to control can take your money, but worse, your freedom too.
Having said this, I should be clear: a conflict between liberty and entitlement shouldn’t be confused with a conflict between wealth and need. Clearer still, there is a stronger case for providing better public services and reducing demand on them, than getting rid of the lot. That is, reducing the use of force to fix problems, and empowering the voluntary.
Thanks to those who arrived at the end of this inaugural column; it was intended as a broad introduction. If your intellectual curiosity is as strong as mine, I hope you’ll keep reading.
Guy McCallum is the ACT board member for the lower South Island and Vice President of ACT on Campus.
This article was first published in OUSA's student magazine, Critic, July 7 2013.
The back down by the Greens on their policy to print money is a nothing more than a sham, forced upon them by Labour in a transparent attempt to hide the Green’s economic foolishness, ACT Leader John Banks said today.
“Labour knows that printing money is a policy of last resort for countries with nowhere else to turn,” Mr Banks said.
“It’s inflationary, erodes savings, reduces the real value of wages and hurts those on low incomes the most.
“No party with any economic common sense, especially one that fancies themselves as part of any future government, would suggest printing money as a cure for New Zealand’s economy.
“That’s why Labour forced the Greens to drop the policy – to try and shake off some of their economic kookiness that will scare the voters off.
“While the Greens may have backed away from the policy for now, there is no doubt that they will put the policy back on the table the first chance they get.
“Labour knows it and is trying their best to hide it - but it hasn’t fooled anyone.
“No matter how Labour tries to spin it, a coalition government with the Green Party puts our economy at risk.
“New Zealand can’t afford to have the Green Party near the levers of power,” Mr Banks said.
Budget 2013 maintains a steady course, but does not do nearly enough, ACT Leader John Banks said today.
"The first big negative is the mediocrity of the projected economic performance in 2014/15 and beyond,” Mr Banks said.
“After the Christchurch rebuild, real GDP growth is projected to slip down to 2.2 per cent for 2016/17. Treasury expects the unemployment rate to be still above five per cent by 2016/17 when the current account deficit in the balance of payments is projected to be 6.5 per cent of GDP.
"What is needed is much greater determination to free up the labour market and reduce the wasteful and unnecessary government spending that is sucking resources out of the industries that are trying to export and compete with imports.
"The second big negative is the failure to put New Zealand on a track to deal with the unsustainable welfare and health policies that are set to take a much greater proportion of GDP in the coming decades.
“Everyone knows that the age of eligibility for superannuation will have to be increased and many people understand that the funding burden will need to be further reduced, perhaps by indexing the benefit to the CPI rather than to wage inflation. In the health area there needs to be much more attention to securing the benefits of competitive supply, price discovery and competitive private insurance.
"Perhaps the biggest disappointment from an ACT perspective is the failure to put in place institutional changes that would make it harder for spendthrift governments to repeat the mistakes of the last Labour government.
“A regulatory responsibility act of the type recommended by the Regulatory Responsibility Taskforce is still needed to protect citizens from foolish, costly government regulations, and greater spending disciplines on government are still desirable.
"Making greater use of competition in ACC and more widely would make providers more cost conscious and promote price discovery.
“Finance Minister Bill English’s Budget represents an oasis of fiscal sanity in the face of Opposition parties whose primeval instinct is to spend, regulate, impose new taxes and print money.
“But if we want our young people to stay in New Zealand and achieve their potential, National needs to do more,” Mr Banks said.
I rise on behalf of the ACT Party and the people of Epsom to support the Appropriation (2013/2014 Estimates) Bill. ACT will support this Budget and associated legislation.
The Budget is a good budget in difficult circumstances.
But it’s not a great budget.
On the OECD’s measure, the government sector is spending about 43 per cent of everything that New Zealanders produce.
That’s 43 per cent. In Australia it is 34 per cent.
Government is taking too much. And it’s making us poorer.
We have lost many of our productive young people to Australia because their economy offers a better future.
The 2025 Taskforce found the income gap with Australia was 35 per cent in 2008. Stats for 2011 indicate that it has risen to 41 per cent.
This gap is unprecedented.
Unless we close it we can expect more and more New Zealand grandparents crossing the Tasman to visit their grandchildren.
There is no mystery. They are richer in part because more of the wealth of Australia is left in the hands of its people.
Yet the Labour Party wants even more spending. You would have to go back to the 1970s to find a Labour Party less ready for Government. They are not serious about addressing the challenges faced by New Zealand.
The future isn’t about outbidding the old dudes and young fogies of the Green Party.
When I first came to Parliament the Government was trying a command and control approach to the economy. It didn’t work then and it won’t work today.
How does this Budget measure up in terms of getting government off-the-backs and out-of-the pockets of hard pressed taxpayers?
Well first the good news.
The size of government is set to decline under this Minister of Finance providing we continue to restrain expenditure.
Spending growth has been reined in, despite the Christchurch earthquake. This Budget continues that trend.
The Government has not blown out the fiscal deficit like so many other countries and the last Labour Government.
The Government has stayed the course on partial privatisation, despite Court action and the dodgy referendum by Labour and the Greens.
There have been significant welfare reforms. We are starting to tackle the culture of dependency and hopelessness.
There is no tampering with the Reserve Bank Act.
There is a willingness to improve the quality of regulation.
We will have a regulatory standards proposal for the House to consider.
There will be meaningful change to the RMA.
The Government recognised that house prices are too high because land values are too high. The Government is moving to free up the supply of land which ACT has long called for.
In education, Partnership Schools are on the way. The Budget provides just under $19 million over the next four years. I want to thank Cabinet and the Minister of Education for making Partnership Schools happen.
The Government will spend $9.7 billion on education in this Budget. The annual funding for Partnership Schools makes up less than half a per cent.
From 1999 to 2008, Labour increased spending on education by 47%. They spent billions and had no significant impact on the tail of underachievement in our schools.
Partnership Schools are a new and innovative option specifically focused on raising achievement for our most disadvantaged students.
Anyone who claims that spending less than half a per cent of the total education budget on a new initiative to raise achievement for our most disadvantaged students is playing petty politics.
Now for the not so good news.
The macro outlook - growth and unemployment - is still mediocre. We look good because most member countries of the OECD look bad. We will not close the gap with Australia without lifting growth and productivity.
The balance of payments outlook points to an international competitiveness problem.
Taxes are too high because of wasteful and unnecessary government spending.
The more expensive the government, the poorer the citizen.
The Government needs to roll back Labour’s poor quality programmes - interest free student loans and Working For Families.
Here is what ACT will be urging National to do in a great Budget.
We regard $78 billion dollars of gross public debt to be too high. So we need to reduce debt through less spending.
We need to put the avgas into the assets sales programme.
I welcome the announcement that Meridian is up next.
Air New Zealand is performing well. Running an airline is a risky and tough business. We don’t need to issue a prospectus. Why not sell all the Government’s shares?
National should dump the Cullen Fund. Let’s use it to pay off our debt. Progressively raising the age of eligibility would help make superannuation more affordable.
We have stopped the growth in Government spending. It is time to start tackling the size of Government.
We have to aim for around 30 per cent of GDP on the OECD measure. That means confronting middle class and corporate welfare.
The 2025 Taskforce found that given the surpluses at that time, reducing core Crown operating expenses to 29 per cent of GDP would allow a top personal, company and trust tax rate of 20 per cent.
The Budget projections through to 2017 start to make this lost opportunity available again. That’s a long haul but it’s a goal worth pursuing.
Spending reductions and partial use of surpluses could fund tax cuts.
Tax cuts would improve economic growth and international competitiveness. The risk with future surpluses is that they are simply used to expand the size of Government.
Finally, this House needs to be braver on regulatory reform.
Further regulatory reform would help New Zealanders to understand how dopey policies like the nationalisation of electricity would be.
Regulatory reform would highlight how poor policies lead to poor laws and that results in poorer citizens. We have a Regulatory Standards Bill on the Order Paper that would help.
The ACT Party and the people of Epsom back this Budget.
We say it’s a good Budget in difficult times.
But in order to tackle the challenges New Zealand faces we need a great Budget.
Unfortunately the most significant risk we face is from bad policy and bad politics generated from the Opposition benches. Labour has debased itself by entering into a bidding war with Russel Norman and the Greens.
My job, indeed my duty, is to ensure they don’t get their hands on the levers of power.
ACT New Zealand will not support Labour MP Damien O’Connor’s Dairy Industry Restructuring Amendment Bill (No2), ACT New Zealand Primary Industries Spokesman Don Nicolson said today.
The Bill would limit the proportion of Fonterra co-operative shares that can be held in its shareholders fund to 20 per cent of Fonterra’s share total.
“Legislating tighter limits on the size of the fund is an unnecessary intrusion into the rights and interests of shareholders to determine the destiny of their own company,” Mr Nicolson said.
“Fonterra has sufficient constitutional safeguards and mechanisms for representation and communication to allow shareholders to determine the size of the fund. Shareholders are more than capable of doing this without interference from Government.
“ACT believes the Government’s regulatory involvement with Fonterra should be limited to ensuring that the supply and sale of milk and milk products within New Zealand are open to competition.
“Fonterra is the world’s largest exporter of dairy produce and New Zealand’s largest company. It competes in an ever-changing world and needs to be able to respond to changing circumstances and continue to evolve as a company for the benefit of its shareholders.
“Excessive and unnecessary government involvement will only hinder its ability to do this,” Mr Nicolson said.
The Sky City Convention Centre proposal is a good deal for taxpayers and Auckland ratepayers and has my support, ACT Leader John Banks said today.
“Auckland is an international city and needs a world class convention venue. But running a convention centre is an economically tough and risky business,” Mr Banks said.
“Globally, taxpayer or ratepayer-owned convention centres often run at a substantial loss and attract on-going subsidies.
“It is essential that any convention centre proposal is taken forward by a seasoned operator that can compete in the highly competitive entertainment industry.
"It is also important that it is the operator that carries the risk, and not the taxpayer or Auckland ratepayer. The Sky City proposal satisfies both those requirements.
"I also support this deal because it does more to protect the few gamblers who cannot control their behaviour. I acknowledge there is only so much that can be done to protect people from themselves. In the end it’s up to individuals to take personal reasonability for their actions. However, the proposal introduces systems to allow data to be analysed for problem gamblers and ups the host responsibility monitoring to 24/7.
"I am satisfied that the regulatory concessions in the Convention Centre proposal are both necessary and reasonable in the circumstances. I will be supporting any necessary legislation," Mr Banks said.