Tuesday, October 22, 2013



Parliamentary sovereignty trumps contracts

Skycity's New Zealand International Convention Centre Bill was reported back [PDF] from select committee today. But while the National majority on the committee recommended that it be passed with only minor amendments, Labour and the Greens made it clear that they would be repealing the bill and its regulatory concessions, with the backing of a Crown Law opinion saying they could do so:

A future Government would be able to scrap the SkyCity convention centre deal without paying any compensation to the casino operator, Crown Law says.

[...]

Advice to the committee from Crown Law says while the deal and the legislation can be scrapped by a future government, it would be liable to pay SkyCity millions of dollars in compensation.

However, a future parliament could also amend the legislation to remove the compensation provisions.

Crown Law warned the wording of any future change must be extremely clear, because courts are likely to interpret ambiguity in favour of the payment of compensation.


Steven Joyce is squealing at this prospect, warning that any attempt to revoke the deal would cause Armageddon and corporate sulking. But Parliament is sovereign, and businesses know that this sort of arrangement is subject to "political risk". SkyCity's been put on notice about what will happen when the government changes; if they continue with the deal and lose a packet on it, they have only themselves to blame.

As for Joyce, if he doesn't want future Parliaments to revoke his sleazy backroom deals, he shouldn't make them. Its that simple.