The Dim-Post

February 13, 2015

On Hooton on Sky City

Filed under: Politics — danylmc @ 9:07 pm

Matthew Hooton had a column in the NBR today about the Sky City deal that loads of people have already tweeted and linked and Facebooked, but I wanted to make a couple of quick comments about.

Firstly, that is just a really great piece of political commentary and part of the reason for that, I think, is that it pulls back the curtain on a major political news story and tells us why something is happening. Most political punditry focuses on what’s happening, and/or what the pundit thinks of it, or what should happen, or wants to happen, or what the different political parties say about an issue. Hooton is an political insider so he takes us deeper, explaining the history and the personalities and the processes, and how they interact with each other.

Jonathan Lynn, the co-creator of Yes Minister and Yes Prime Minister once said that he wanted his show to explain to people how government worked. How power and influence were wielded. How decisions were really made. And that, he explained, is why he never wrote any scenes in the House of Commons. There is some politics in the House, and much theater, but no government. Nothing that truly mattered. It’s a quote that came back to me this week when Winston Peters questioned the Prime Minister in Question Time about whether he dyed his hair, and ‘why the carpet didn’t match the curtains.’ You could just about hear the columnists in the press gallery sighing with relief. ‘The Prime Minister’s pubes! That’s this week’s piece sorted.’ Hooton’s column is a reminder that political commentary can be very vital. It doesn’t have to be trivial nonsense.

Having said all that, Hooton can write this particular piece because he isn’t a political journalist. He doesn’t have to maintain a good relationship with the Prime Minister’s office. He doesn’t rely on National’s press secretaries to feed him stories and tips. On the contrary, a lot of the people he’s writing about here are his enemies and commercial rivals. But my point is that political columns about government and ‘what’s really going on’ are a lot more important than whatever is happening in the House, or whatever trivial gaffe someone made, and they’re also a lot more compelling. It’d be nice to have more of them, and that’s supposed to be the point of having gallery journalists who are ‘political insiders’.

My other point disagrees with Hooton a bit. He wrote:

Mr Joyce’s botulinum-grade arrogance is making the debacle worse.

Mr Joyce genuinely believes his commercial background consolidating provincial radio stations makes him a match for Mr Morrison’s quarter century of experience in the Asian and Australasian gambling industries.

The SkyCity team is laughing at him the way Kerry Packer laughed at Alan Bond over Channel Nine and Toll Holdings laughed at Michael Cullen over KiwiRail.

Despite having no experience in the procurement and management of half-billion-dollar construction projects, Mr Joyce and the prime minister’s chief of staff, Wayne Eagleson, took it upon themselves to deal directly with SkyCity over the terms of the convention centre contract and the associated regulatory-relief package.

The problem with government Ministers negotiating directly with Sky City goes a bit deeper than individual hubris, or incompetence. Sky City is a profitable regulated private monopoly. The best way for it to make more money is to win concessions from the government, and it can – and probably has – invested many hours and millions of dollars paying lawyers and accountants and lobbyists to try and figure out how to extract value from the state and the taxpayer. But Key and Joyce – who represent the taxpayer – don’t have many hours and millions of dollars to throw away trying to beat Sky City at the negotiating table. They have a country to run. This can only be a very peripheral issue for them. (Even now that the deal has exploded into a public relations fiasco Key is busy committing our troops to Iraq. You like to think he’s paying a bit more attention to that than the convention center.)

So Key and Joyce will never be able to out-negotiate Sky City because of the massive asymmetry in resources between the two negotiating partners. This isn’t a new problem (although this government seems to think it is). The problem of how the state and the private sector interact in free market democracies has been with us for a while now, and solutions to all of these problems of influence-peddling and conflicts of interest and information asymmetry have been solved and implemented in New Zealand for several decades. We have the SOE model and the State Services Commission and laws and processes and the Auditor General and basically a whole fucking public service to avoid this exact situation which Key and his Ministers have blundered into. This disaster stems from the right’s contempt for the public service. They’re just bureaucrats. Glide time. It’s all walk-shorts and red tape. The idea that those hated bureaucrats were actually an apparatus designed to protect Key, Joyce et al and prevent them from making a huge, predictable and easily preventable mistake wouldn’t have occurred to them.

41 Comments »

  1. No respect.

    Comment by Sacha — February 13, 2015 @ 9:17 pm

  2. Last para, spot on, with the exception that Key and Joyce could have “out negotiated” SkyCity simply by not engaging with them in the first place – in the same way that good corporate executive management lets their commercial teams and lawyers run negotiations beyond the initial overtures, and is only there for the palm pressing.

    By electing to not let PS do their job because of an ideological bent in way does support Hooton’s hubris/incompetence hypothesis, because it is precisely not what you would expect a competent corporate leader to do.

    Comment by Gregor W — February 13, 2015 @ 9:21 pm

  3. sounds about right to me

    Comment by Rick Bryant — February 13, 2015 @ 9:25 pm

  4. “But Key and Joyce – who represent the taxpayer – don’t have many hours and millions of dollars to throw away trying to beat Sky City at the negotiating table. They have a country to run.

    So Key and Joyce will never be able to out-negotiate Sky City because of the massive asymmetry in resources between the two negotiating partners.”

    Yes. Clowns who rate their abilities more than warranted are always most willing to trade em against protections for *everyone* else. Choose your representative better.

    Comment by Sacha — February 13, 2015 @ 9:30 pm

  5. Reblogged this on Talking Auckland and commented:
    This is highly worth reading especially the last paragraphs on the actual role of the public service National and their allies do demeanour.

    And through that demeanour of the public service they have landed themselves and us in a absolute stinking pile of shit I expect to find on the Untreated Sewage Holding Tank at the Mangere Sewage Plant.

    This leads to a bitter point I would not let those who have demeanour the public service in that way anywhere near our democratic institutions nor even businesses.

    Bureaucrats are loathed for their job is to protect the Government, us and the democratic apparatus we live in. So then………

    Comment by Ben Ross - Talking Auckland — February 13, 2015 @ 9:33 pm

  6. I don’t think that demeans what you think it demeans

    Comment by Sam — February 13, 2015 @ 9:39 pm

  7. Joyce and Key: they’ve always been provincial hucksters so it’s unsurprising that they should have been caught up in what amounts to a metropolitan scam. I guess the most depressing thing in this whole fiasco is that the electorate remains relaxed about the re-election of these patsies.

    Comment by Christopher T — February 13, 2015 @ 9:39 pm

  8. Colin Espiner (fearless press gallery truth-teller) becoming Sky City’s PR guy does give this whole story a priceless symmetry.

    Comment by sammy 3.0 — February 13, 2015 @ 9:45 pm

  9. It doesn’t matter whether its bureaucrats or Joyce or anyone, the government shouldn’t be in this and it should not be this big and it should not be spending $80 billion. Under such circumstances, it is inevitable that these kind of scams/ fuckups will occur. My vote goes to anyone who will reduce govt to half of what it is now and put $40 billion dollars back in the pockets of the people who earned it. For starters.

    Comment by Redbaiter — February 13, 2015 @ 10:52 pm

  10. Never been a huge fan of Hooten and him falling out with Key doesn’t change that.

    So what’s the expectation of govt being involved in business? They shouldn’t or some mistakes might be made?

    Comment by NeilM — February 13, 2015 @ 11:23 pm

  11. My big take away from that story was the confirmation that Wayne Eagleson – an unelected, politically appointed, and partisan National party flunky – wields enormous power (effectively a politically appointed, unelected roving minister with the ear of the PM) completely outside any sort of constitutional recognition or restraint. Eagleson is not content just (apparently) negotiating on behalf of the taxpayer half billion dollar deals with his cronies at Sky City – we should also recall that according to John Key he is also (apparently) in de facto charge of the day to day political management of the SIS. Key’s use of a politically appointed flunky to operate as a sort of Star chamber cabinet is noteworthy and novel, and to my mind a corruption of our Westminster checks and balances that has more in common with US presidential political practice than a Westminster system – and it is an attack on basic democratic accountability that, it seems, is just to hard for John Armstrong and co who would rather talk about the colour of John Key’s pubic hair.

    Comment by Sanctuary — February 13, 2015 @ 11:28 pm

  12. @Sanc: Giving power to unelected bureaucrats is a staple of the Westminster system.

    Comment by kalvarnsen — February 13, 2015 @ 11:41 pm

  13. “…@Sanc: Giving power to unelected bureaucrats is a staple of the Westminster system…”

    That’s a pretty stupid comment, even for you.

    Comment by Sanctuary — February 13, 2015 @ 11:46 pm

  14. Danyl: “This disaster stems from the right’s contempt for the public service. They’re just bureaucrats. Glide time. It’s all walk-shorts and red tape. The idea that those hated bureaucrats were actually an apparatus designed to protect Key, Joyce et al and prevent them from making a huge, predictable and easily preventable mistake wouldn’t have occurred to them.”

    Crony capitalism can do that. Sir Joh’s Queensland ran wholly on it.

    NeilM: “So what’s the expectation of govt being involved in business? They shouldn’t or some mistakes might be made?”

    Cost overruns are common with mega-projects. But in this case, an explicit promise was made that the taxpayer wouldn’t have to shell out – and subsequently broken. Especially from a government that can’t decide whether NZ is ‘borrowing $300m a week’ and on the road to Greece, or if NZ ‘has a growth problem, not a debt problem’. I think what they really mean to say is that if you didn’t go to Auckland Grammar or otherwise bought your way into the country club, you’re ‘unambishus’ and a maker of ‘poor choices’.

    Comment by Kumara Republic — February 14, 2015 @ 2:38 am

  15. @Sanc: Oh, a personal insult! I guess I won’t argue with that because I’m too busy crying.

    Seriously, though, a large bureaucracy has been part of the Westminster system ever since its formalisation under Gladstone and Disraeli. Or are you denying that 19th century British politics involved delegating substantial power to bureaucrats who were not directly accountable to the voting public (small as it was back then)?

    Comment by kalvarnsen — February 14, 2015 @ 4:27 am

  16. Eagleson isn’t a civil servant, a mild mannered bureaucrat of the kind so despised by the right. He is a politically appointed flunky whose loyalty lies entirely to the National party and specifically to his Caudillo John Key. Spot the difference?

    When spending, generally an elected minister of the crown directs his non-political civil service as to how to spend public money, with a swath of rules and disclosures to protect against corruption. They don’t get a politically appointed lackey to call his mates and stitch up a mates rate deal for hundreds of millions of taxpayer dollars. Spot the difference?

    Key has always held the Westminster system and it’s ways doing things in contempt. He is far more an American than we realise – he clearly much prefers the US presidential style of democracy, where hand picked unelected members of the executive office (“advisors”) have all the real power. If Eagleson, and perhaps other politically appointed members of the PMs office, are now making policy and spending public money then the public need to be informed of this change in constitutional behaviour and the media need to scrutinise them far, far more closely.

    Comment by Sanctuary — February 14, 2015 @ 9:02 am

  17. @Sanc: You should read Phil Magnus’ biography of Gladstone, it might cure you of some of your misty-eyed reverence for the putative political neutrality of the British capitalist-imperialist state.

    Comment by kalvarnsen — February 14, 2015 @ 9:46 am

  18. “…You should read Phil Magnus’ biography of Gladstone…”

    When Gladstone entered parliament they didn’t even have a secret ballot, the relevance of his ministries to NZ in 2015 is a bit lost on me. However, I can see that you probably subscribe to the paranoid school of right wing thinking when it comes to the civil service, regarding it as a fifth column of liberal and socialist vice. Which is kinda proving Danyl’s point about the rights view of the civil service, n’est-ce pas?

    Comment by Sanctuary — February 14, 2015 @ 9:54 am

  19. This disaster stems from the right’s contempt for the public service. They’re just bureaucrats. Glide time. It’s all walk-shorts and red tape. The idea that those hated bureaucrats were actually an apparatus designed to protect Key, Joyce et al and prevent them from making a huge, predictable and easily preventable mistake wouldn’t have occurred to them.

    The right like a deal, the political win of a good deal brings resolve to their base. $400 million for a world class convention centre in Auckland, with the costs borne by a private company, is the sort of exceptional good election year deal that gets rightists really happy. The deal was political.

    You are correct, it would have been better for New Zealand if we had bureaucrats making the decisions and finding out the true cost beforehand. We as a nation would be better for it.

    However this is not a right wing only occurance. The left like the enviroment and a grand green act in an election year brings resolve to their base.

    …Toll Holdings laughed at Michael Cullen over KiwiRail.

    Comment by unaha-closp — February 14, 2015 @ 10:36 am

  20. “This disaster stems from the right’s contempt for the public service. They’re just bureaucrats. Glide time. It’s all walk-shorts and red tape.”

    Actually, they use the public service far more effectively than their predecessors who thought they were the best policy analysts in the land and the role of the public service was simply to take notes and reflect on the brilliance of their Ministers. National Ministers – in general – are less insecure about what ideas they have than their predecessors and hence are able – in general – to engage with public servants in a way that they were not under Labour. Not long after National were elected Bill English gave a speech to a group of senior public servants and a few others. His message was, the GFC has created serious problems that are going to require all of the intellectual horsepower of both politicians and the public service if we were to manage the situation well. He said, think bold thoughts and let us worry about the political risk. The reaction was interesting. Some were enthused after 9 years of being micro-managed but others said they would be extremely cautious because 9 years of Labour had taught them thoroughly that shit flows only down hill.

    Comment by Tinakori — February 14, 2015 @ 5:38 pm

  21. Sucking your masters dick in public is seldom an edifying spectacle Tinakori.

    Comment by Sanctuary — February 14, 2015 @ 7:01 pm

  22. One should remember when one points a finger three of your own are pointing back at you.

    Comment by Lee Clark — February 14, 2015 @ 8:07 pm

  23. Tinakori: try telling that to anyone working for DOC or MFAT.

    Comment by Kumara Republic — February 14, 2015 @ 8:53 pm

  24. “When Gladstone entered parliament they didn’t even have a secret ballot, the relevance of his ministries to NZ in 2015 is a bit lost on me”

    Well, you’re the one who started talking about the ‘Westminster system’. The Gladstone/Disraeli era is generally regarded as the era when this model of government was formalised.

    As for my opinions, I am myself a former civil servant and I agree that a civil service is a necessity, and that the neoliberal approach is very damaging both long term and short term. I just don’t think that this is a Westminster system vs American system issue. The American system has a large civil service, while the Westminster system has a tradition of politicised senior civil servants that is pretty well entrenched. You don’t think Michael Dobbs or Alastair Campbell got their jobs because they rose through the civil service now, do you?

    Basically I am not disagreeing with you for ideological reasons. In fact I imagine we agree substantially on most of the big picture. I’m disagreeing with you because your pseudo-intellectual attempts to claim some kind of academic authority for your arguments by throwing around terms like “the Westminster system”, which you clearly don’t understand, is ridiculous even if it’s deployed in support of an argument that I broadly support.

    I know you think the only reason anybody would disagree with you is because they’re some horrible cackling neoliberal who eats single mothers for breakfast, but actually it’s because you’re a pompous judgemental idiot who is in love with the sound of his own typing.

    Comment by kalvarnsen — February 14, 2015 @ 11:14 pm

  25. Well, that was some riposte. I’d give that an 8.5 out of ten, kalvarsen, it would have been closer to a ‘9’, but some of us hang awake in our cells dreaming of eating single mothers for breakfast, so I kind of lost a tiny bit of focus at that stage. Otherwise, I have to say, you kinda nailed it.

    Comment by Lee Clark — February 15, 2015 @ 8:08 am

  26. I’m not 100% sure just what it is that Kalvernsen and Sanctuary are squabbling about, but just to be Graeme Edgeler for a second … this is a bit wrong:

    The American system has a large civil service, while the Westminster system has a tradition of politicised senior civil servants that is pretty well entrenched. You don’t think Michael Dobbs or Alastair Campbell got their jobs because they rose through the civil service now, do you?

    Neither Dobbs nor Campbell were ever “senior civil servants”. Dobbs was an advisor to Margaret Thatcher, a Conservative MP speechwriter and a Government Special Advisor. Campbell was Blair’s chief press secretary and then Prime Minister’s Director of Communications. Those weren’t “civil service” (or, “public service” in the NZ parlance) jobs.

    Comment by Andrew Geddis — February 15, 2015 @ 9:32 am

  27. Well, it seems my replies are being blocked. That’s nice, Danyl.

    Comment by kalvarnsen — February 15, 2015 @ 10:36 am

  28. “Sucking your masters dick in public is seldom an edifying spectacle Tinakori.”

    Ah, the charm of the class warrior. I’m afraid you are going to have to find a slightly different metaphor, Sanctuary, as I’ve worked for both National and Labour Governments and have been happy to do so.

    “Tinakori: try telling that to anyone working for DOC or MFAT.”

    Yes, everyone labouring under the McCully yoke automatically has the sympathy of all other public servants. But, while McCully is a singular phenomenon in National we used to joke after Labour had been in power a few years that they had taken entirely the wrong moral from his behaviour as a Minister in the Bolger and Shipley governments.While other National Ministers had disdained his treatment of his staff and public servants the Labour Ministers had seen it as some kind of model to aspire to.

    On DOC I am not sure which Minister you are referring to – Nick Smith, Kate Wilkinson, Maggie Barry? Are you also aware of just how useless some of DOC’s non-Ministerial stakeholders think the Department performs?

    Comment by Tinakori — February 15, 2015 @ 11:58 am

  29. “On DOC I am not sure which Minister you are referring to – Nick Smith, Kate Wilkinson, Maggie Barry? Are you also aware of just how useless some of DOC’s non-Ministerial stakeholders think the Department performs?”

    All of the above.

    Comment by Kumara Republic — February 15, 2015 @ 1:46 pm

  30. So Key and Joyce will never be able to out-negotiate Sky City

    That’s weird because Sky City has just said it won’t be costing taxpayers a cracker. Who would have thought that a rapacious monopoly could be so altruistic…

    Comment by ross — February 15, 2015 @ 3:28 pm

  31. Ah, so the eyesore option has won the day then. A great result for New Zealand! Enjoy your triumph, Ross.

    Comment by Judge Holden — February 15, 2015 @ 4:12 pm

  32. One would expect now that the ” eyesore option has won the day” that the favours granted to Sky City as part of the original contract can now be partially rescinded too? I’m looking forward to the announcement to that effect from Joyce on Morning Report tomorrow…

    Comment by Michael — February 15, 2015 @ 4:19 pm

  33. True date. Michael. I mean, Joyce is so great a negotiator surely he wouldn’t have surrendered to Sky City with no concessions.

    Comment by Judge Holden — February 15, 2015 @ 4:34 pm

  34. Joyce looked like a little boy who had just had all his toys taken off him.

    Comment by Sanctuary — February 15, 2015 @ 6:14 pm

  35. When I finished reading this post I felt like I had just been listening to Humpfrey Appleby.

    Comment by davidt1008 — February 15, 2015 @ 7:41 pm

  36. davidt1008: or Allan B’Stard, maybe?

    Comment by Kumara Republic — February 15, 2015 @ 9:02 pm

  37. 26: to be even more strictly Edgeler (I wouldn’t raise it but you did suggest that level of pedantry) – both of those people were civil servants – spads and press secretaries are members of the UK civil service, just not the permanent civil service. What’s his name, Damian McBride, he was permanent civil service (Oxford PPE, fast track and all!) before he got sucked into the Blair/Brown vortex.

    Comment by Keir — February 15, 2015 @ 11:33 pm

  38. So what did Hooten say on Nine to Noon today to cause the politics segment to not be loaded on the RNZ website???
    http://www.radionz.co.nz/national/programmes/ninetonoon

    Comment by MeToo — February 16, 2015 @ 12:29 pm

  39. And now it has been posted. Looked odd – every interview there except one…

    Comment by MeToo — February 16, 2015 @ 12:53 pm

  40. Quite right. What’s John Key ever done in business?

    Comment by rrm22 — February 16, 2015 @ 1:18 pm


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