25 April 2012

Sky's the limit?

In England at the moment, the Culture Secretary Jeremy Hunt is facing calls from the Opposition for his resignation due to the emergence of evidence that he may have decided in advance to favour Rupert Murdoch's company News Corp in its bid to take over BSkyB. Even though he was required to act impartially in making the decision on the takeover, it appears from emails presented to the Leveson Inquiry (which is looking into the News Corp phone-hacking scandal) that Hunt may have made up his mind in advance and may have been sharing inside information with News Corp executives. When it comes to commercial deals, ministers and public servants must be impartial - and be seen to be impartial - in order to give all competitors a fair go, to preserve public confidence, and to avoid any perceptions of cronyism or (dare I use the word?) corruption. Meanwhile in Godzone, the Green Party has politely requested the Auditor-General to investigate how Sky City became preferred bidder in the proposal to build a convention centre in Auckland. They are concerned about a possible level of closeness between Ministers Key and Joyce and the managers of Sky. Surely, if only to clear the names of the ministers concerned, an investigation is now warranted. Gambling is not a free-market industry. It is a highly regulated one. It requires close regulation due to the social effects of gambling, and due to the dangers of its becoming mixed up with crime and corruption. So, the actions of ministers around gambling must be seen to be squeaky clean. And there is now a suggestion that alternative bidders didn't get a level playing-field. Key claims that the Sky deal is superior because it requires no capital from government, but he seems unwilling to estimate the social costs of problem gambling that may affect us as taxpayers by increasing Sky's grip on this tightly regulated industry. Mr Key has argued that, even though Sky will end up with more pokies, the result nationally will be that there will be fewer pokies. But this means that the deal with Sky also guarantees them a larger share in a market that is declining in numbers of machines. Not only does the deal over the convention centre look like it could be favoritism, but the delivery of a greater market-share goes along with it. It's estimated that each pokie at Sky City earns about $140,000 per year - a sum much higher than the national average ($47,000). Anyone can do the sums! Whatever the outcome, the whole thing has turned into a PR disaster for Sky and for the National Party.


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