by frog
Here’s an idea; instead of letting the Government sell our gambling laws, let’s sell the PM – apparently the Aussies want him.
John Key met financial and business leaders during a visit to Sydney and Melbourne last week.
One was clearly smitten.
The offer was from Australian-based SkyCity board chairman Rod McGeoch.
The New Zealand Government is considering a proposal to allow SkyCity a relaxation of casino gambling laws and an increase in their pokie machine numbers in return for building a new convention centre in Auckland.
Maybe if Mr Key was Prime Minister in Australia casinos might have a better chance of influencing Government.
Last year the Victorian Government ruled out a second casino for the state which killed plans for a $400 million convention centre.
Published in Society & Culture by frog on Mon, July 9th, 2012
Tags: pokie machines
on the trolls and those who are unable to keep on topic
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Is that a good outcome?
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For Australians in general? Yes.
Moreover, the notion that not having a Casino means you can’t have a convention center is pretty effing bizarre on its face. If something is worth building, it is worth building *without* selling out the public health and well being to criminal enterprises or businesses.
The association of gambling with convention centers seems to be something that is popular down here for some reason… don’t remember it being all that common outside of Vegas and Atlantic City in the US.
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“Is that a good outcome?”
It’s uncharacteristic, at least. It’s interesting living in Victoria and seeing the wildly different attitude to gambling here compared with what I’ve experienced in NZ. This is a state that effectively devotes a public holiday towards celebration of gambling. When I went on one of the river boat cruises 18 months ago, the guy commentating made a big point of the casino having ~4400 pokie machines.
There’s media publicity about negative gambling issues but where it exists, the message is entirely ‘gamble responsibly’, on the assumption that gambling is so much a way of life that popular opinion won’t accept a line which says it’s a bad thing. I couldn’t comment on the effectiveness or effects of gambling behind the scenes. I don’t hear much about them, which could be by design.
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Mike, Australia has (from memory) more pokie machines per capita than almost any other. Only Macau and other small casino city-states come close.
The social harms are enormous.
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I for one would be glad to see him & his whole party join the 50k strong annual exodus.. good riddance !
Kia-ora Greens
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In 1987 wages in Australia and NZ were about the same. Both countries had elections and Labour/Labor was re-elected. However In NZ Labour was really ACT in disguise and the policies of the two countries continued to diverge.
The Rogernomes and their supporters rubbed their hands as they claimed that NZ would go ahead and leave Australia behind. NZ continued the same policies under the next National government but the Australian Liberals only went a little way along that path when it was their turn.
The result is clear to see. Freemarket policies and privatisation have failed NZ. Australia have done well to avoid them.
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George, this would not surprise me at all. And yet if you suggest gambling might be a bad thing, people sometimes look at you as if it’s
invasiAustralia Day and you’re not running up and down the street wearing a flag, smiling and screaming about how awesome Australia is.But hey, it’s only gambling when the odds are against you. Otherwise it’s tipping or a flutter or wagering or one of the many other synonyms.
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But that’s the knub of it, isn’t it? Is a convention centre worth building?
Clearly, the answer is “no”. If it were worth building, then some groups of someones would have a proposal to build one. As it happens, there were several groups of someones, all of who said (loosely) “yeah, we’d love to build us a convention centre, give us some money”.
The feasability study (2009, [link] ) notes that “…the centre would operate broadly on a
break-even cash flow basis”
What private invester wants to invest a metric shedload of wonga into a project that may just break even?
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Barry:
Free market policies have failed? They only fail where you don’t get proper competition. Don’t be so simplistic.
And remember: The government is just another corporation. Often in the worst possible form, too.
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Free market policies have failed? They only fail where you don’t get proper competition. Don’t be so simplistic.
Absolute competition (i.e. genuinely unfettered) does not exist anywhere, and neither does the “free market” ; it’s a misnomer as the term implies no actors other than buyer and seller, thereby excluding externalities (i.e. reality).
So to attach the two concepts is also simplistic.
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Worse, the government is NOT another corporation. It has a different purpose entirely, and is answerable to everyone, not just its shareholders.
This is a country. It is not a corporation. Do not EVER confuse the two.
BJ
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Barry says “Freemarket policies and privatisation have failed NZ. Australia have done well to avoid them.”
But Australia have private airlines, banks, electricty companies, railways, telecommunication companies, gas companiesetc – that all used to be govt or state owned.
Australia has done well because of mining. That’s what makes their dollar 30% higher than ours (because countries have to buy A$ to buy ore and minerals). And because of the currency conversion, wages are 30% higher.
But when it comes to purchasing power parity, it’s not that different. A recent survey found goods in NZ that cost NZ$1, cost A$0.98 in Australia.
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And recent OECD stats show a basket of goods costing US$132 in NZ costs US$165 in Aus.
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Personally I’d go more specific and say it’s answerable to all citizens and residents, and possibly temporary visitors if they’re people living here for a time. It’s not answerable to companies or other governments, whether they’re in New Zealand or overseas.
This doesn’t mean a government can’t or shouldn’t work with those entities, but what it does as a consequence needs to be primarily in the interests of all those people the government represents—not just the people who voted for it.
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The UK was the same, lots of public stuff, pretty much all of it flogged off.
In the UK, as globally, the only privatisations that has actually delivered a better outcome for the country and its people generally is telecomms and airlines. All the others are to a greater or lesser extent natural monopolies and the private model works differently but no better than the public model. As time goes on, the situation gets worse, as the standard way private monopolies can boost their bottom line is by cutting stuff like maintenance and investment, which is cash today for less service tomorrow. So you end up with aging infrastructure. You don’t have to look far just in New Zealand to see aging in action.
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D Buckley says “So you end up with aging infrastructure. You don’t have to look far just in New Zealand to see aging in action”
Exactly – power supply infrastructure, cook strait cable, postal service, roads and motorways, etc – and they’re all govt owned.
However I agree that there are pros and cons with everything. Govt run telecom was totally appalling – a weeks wages to call the far end of the country, fill in an application form to get a new phone, then go on a waiting list for weeks or months before your got it – and that was just a hand set.
And if you had a fault, good luck getting it fixed within a week.
However there are people with rose tinted glasses and blinkers who think the govt run telecom was great.
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The “cook strait cable” (i.e. the HVDC link) was rated at 600MW when built. Pole 2 is currently rated at 700W and Pole 3 is being constructed to replace Pole 1 and will eventually also have a 700MW rating. I would not describe a 130% increase in capability as an example of aging.
Transpower is government owned, but it is also government regulated and has been hamstrung in what it can do by the Electricity Commission, although in general New Zealand has had a pretty good result from its electricity providers, except for the high CO2 emissions.
However since NZE was split up by Max Bradford, the generation companies have lost responsibility for ensuring that there will be enough generation, and instead have been trying to maximise their profits by gaming the system and taking risks with the weather.
Trevor.
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Trevor says “I would not describe a 130% increase in capability as an example of aging.”
It has been underfunded for decades. If pole 2 went out today, pole 3 is not finished yet, and pole one is nearly 50 years old and is only used in very low capacity and only in emergencies. The current capacity, right now, today, is little different to half a century ago (700Mw vs 600Mw).
We’ve been playing a high risk game for years with governments from the left and right massively underfunding infrastructure.
Muldoon was in power 30 years ago, and Clyde Dam was one of his “think big” projects. What major power projects have we built since then?
(and lack of investment over many years in transpower was behind Auckland blackouts a few years ago that had us labelled “third world” in international media).
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How much is john Keys personally worth ???
Does the fact that he owns 9 houses ( or is it more now ? ) have a bearing on his decision not to bring in a capital gains tax on housing??.
Its interesting that overseas the calls to jail bankers are growing very loud while in NZ we have one running the country ( into the ground ).
Do we need a public inquiry into John Keys and his “deal making”
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Photonz1 argued:
“Muldoon was in power 30 years ago, and Clyde Dam was one of his “think big” projects. What major power projects have we built since then?”
30 years ago, NZE was government owned and invested in major electricity projects. Now we have SOEs and privately owned electricity generators, there hasn’t been any major investment. Thus Photonz1 sinks his own case.
I’ll throw him a life-line:
There has been significant investment in geothermal projects and various wind-farms. No generators of the scale of Benmore or Manapouri, but the new generation adds up. Geothermal now generates over 13% of our power and wind generates over 3%, and both are expanding.
Auckland’s blackouts were not directly caused by a lack of funding. Instead contractors did not do what was intended, and other mistakes were made including filling trenches with the wrong material. Lessons were learned and our system is more robust as a result.
Trevor.
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Trevor says “Now we have SOEs and privately owned electricity generators, there hasn’t been any major investment”
Duh – who do you think owns the SOEs, transpower, pays for roading etc.(clue – they’re not privately owned)
Trevor says “Auckland’s blackouts were not directly caused by a lack of funding.”
Aucklands power failures were caused by ancient 40 year old gas insulated cables that were used for Aucklands main supply AFTER they should have been replaced – and you try to claim this wasn’t caused by a lack of infrastructure funding.
Unbeleivable.
And when the govt did spend on infrastructure, it wasted billions. Clyde Dam costs us many many times more to build that it’s actually worth. Even decades later, it ‘s still not worth what we spent on it decades ago.
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Still spouting bullshit Photo.
The Clyde dam will return value for many decades to come.
The value of owning generation is not just the immediate dividends, but losing the power to adjust them and use them for public good in future.
A future Government can decide for example, to forgo power dividends to assist the wider economy or encourage sustainable energy generation. In any case dividend income remains in NZ.
A private owner will expect 10 to 20% ROI which disappears overseas to join the 14 billion plus hole in our balance of payments caused by previous privatisation.
As for telecoms. The wait lists for telephones in the States pre digital exchanges (privately owned) were much longer than ours. Ascribing the results of improved technology to private ownership is a lie.
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Gerrit.
New Zealanders have, on the whole, shown they are careful of minority rights. In our history it is Government, not the general population, who have lagged behind in rights to minorities. Note: Over 60% in favour of allowing gay marriage, for example. Except for a small vocal bunch of rednecks most people, even if not totally supportive of treaty settlements, accept that Maori do have prior rights.
Our problem is we have National, and often Labour, Governments who like dog whistling to extremists. Obviously that is where the polls tell them the swinging vote lies.
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I don’t know much detail about Auckland’s power supply problems, but there are other examples of catastrophic failures which had little to do with funding. (Cave Creek was one. Under-funding was present, and serious under-funding still is present by many accounts, but that catastrophic failure was more directly linked to a flawed culture and systems which have since been dealt with.) What makes Auckland’s power supply failure different?
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This is funny – Kerry says “Still spouting bullshit Photo.”
Then he tries to tell us Clyde Dam (privately owned since last century) will provide return to the govt for decades.
Typical of large govt-built projects of the time, the Clyde Dam cost taxpayers many times more than it was (or ever will be) worth.
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photonz are you arguing that there is no value to New Zealand in having such an infrastrucuture asset as a dam providing renewable energy power, because it is now in private ownership?
And no value to the government in selling it – and using the money for investment elsewhere?
Is this your flip flop?
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SPC asks “photonz are you arguing that there is no value to New Zealand in having such an infrastrucuture asset as a dam providing renewable energy power, because it is now in private ownership?”
No.
Merely pointing out that over the last 30 years, govt has either failed to invest in infrustructure, or invested badly – paying way more for the Clyde Dam than is ever was, or ever will be worth.
Our SOEs return the govt $200m per year on the $6b that will be sold.
The same value of assets under ACC investment management gets $600m per year – THREE TIMES better return (based on their average investment return of 9.9% over the last 15 years).
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There is an unstated return in having energy available for the population and business economy of the country way beyond mere profit on capital invested. Thus comparing this return to investments made to derive a return of itself is invalid.
More relevant is comparing the rate of return from the energy SOE to the rate of return from the investments made from the sale proceeds – some road investments provide quite low rates of economic benefit.
Of course once the SOE’s are sold on the market – profits will rise and the cost of this will be placed on consumers and the business economy.
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SPC – what is your rate of return on a school?
What is the loss of return in NZ having a stock market (the economic engine room of most economies) that’s so small and weak that most investment experts advise to put at least 75% of share investments into offshore sharemarkets.
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Photonz,
If a $200 million return on a $6 billion asset is pretty poor, then who would want to buy the asset? If the buyer aims to increase the return on the $6 billion, how will they achieve this, and who will end up paying?
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photonz, all investors spread risk by diversifying – why else would global funds be investing here in our small market?
samiuela, photonz knows very well that there are gains (rising share value) other than dividends in owning the SOE’s – but wants them ignored when opposing the government continuing to own them on our collective behalf. He of course supports private investors making these gains in future and not paying any CGT on them.
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But yes energy costs to consumers will rise faster than they would have in the past. The real question is whether corporates can block government decision-making over energy use – such as ending use of carbon for power generation if this adversely impacts on a foreign corporate – such as Contact (TPP).
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SPC says “samiuela, photonz knows very well that there are gains (rising share value) other than dividends in owning the SOE’s ”
If there are gains, then your “never sell” policy, means that you flush any gains away so they can never ever provide a single dollar of benefit to any New Zealander.
Historically, electricity demand grows at just 2.5% per year. Last year it didn’t grow at all. So where are all these big capital gains going to come from?
One company cannibalising market share from another company?
As an example, Contact Energys share price is 20% lower now than it was in 2005. When you add 7 years inflation, that’s closer to 40% lower. Even if it went up 10% per year, that will still take until 2017 just to get to where it was in 2005.
(In fact when adjusted for inflation, the total value of the company is little changed from when it was privatised well over a decade ago).
samieula asks how investors will get a decent return, and who would want to buy. In short, they probably won’t get a very high return. The electricity sector is known for low but reliable returns.
The returns are probably not a lot different from bank interest rates, with the advantage that on top of your return, your capital is probably going to keep up with inflation in the long term – something the bank doesn’t do.
Many people who want to protect their savings from inflation, and get a reliable albeit low return will invest.
A large number of funds will be forced to invest, as they automatically have to have a certain percentage of the countries largest companies depending on their weightings in the market. i.e. many funds track the largest ten companies, top 30 companies etc.
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The auckland power blackout was caused by a corroded shackle.
A part which was probably worth less than $100 .
Also, “the four SOEs potentially up for partial sale generated total dividends last financial year of NZ$732.5 million”
photos ramble was as usual dishonest national party bullshit
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The actual cause of the big Auckland blackout was that the system operators didn’t know the actual capacity of the transmission infrastructure. They had an assumption of the capacity which was (and always had been) incorrect.
This happens on a fairly regular basis globally, though usually with less dramatic consequences. The pressure is always there to keep the supply on, so when events happen that require loadings to be increased on some elements of the transmission infrastructure, they will be run up to the limit (and often beyond). Doesn’t always pay off.
Had the operators known the actual infrastructure limits, they would have just loadshed chunks of Auckland to keep the loadings acceptable. Would have made the news, there would have been a lot of belly-aching, but it wouldn’t have been disastrous.
Electrical transmission infrastructure has a minimum design lifetime of fifty years.
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