The Age: Labor will honour Crown deal. September 16, 2014, Richard Willingham and Jason Dowling
The latest Crown expansion deal has been pushed by the Napthine government without the social and economic impact assessment that was required for the last casino expansion. Photo: AFR
Labor will honour the Napthine government’s lucrative new deal with Crown Casino, which includes a $200 million “poison pill” and extends the licence to 2050, after striking a separate deal with the casino to retrain 500 retrenched workers at its facilities.
Opposition Leader Daniel Andrews said it was with “some sorrow” that his party would not oppose the $910 million deal because it was not able, from opposition, to rewrite the government’s commercial arrangement with Crown.
“Given our very obvious concerns, our misgivings about this commercial arrangement between the Liberal government and Crown, we have had discussions with Crown and made it clear to them they needed to do more than just talk about jobs,” he said.
Just last week, Labor revealed it will not build the East West Link if it wins the November 29 poll, even if the Napthine government signs contracts before the election.
Mr Andrews said since the government announced the Crown package, Labor had been in talks with the casino giant to secure a four-year package to retrain 500 retrenched workers within Crown Casino’s education facilities. The workers from other industries would be retrained free of charge.
“We can pretend that we can rewrite the deal but that doesn’t make sense, we can scuttle the deal and cost jobs at Crown or we can make the best of this, and that is exactly what Labor has done,” Mr Andrews said.
The Age can reveal that the latest Crown expansion deal has been pushed by the Napthine government without the social and economic impact assessment that was required for the last casino expansion, despite the Treasurer demanding such analysis when he was in opposition. It will grant the casino an extra 128 poker machines, 40 gaming tables and 50 more automated table game terminals.
The government has also removed the super tax on commission-based play for international and interstate VIP players.
In return, the government will collect an additional $910 million in tax from Crown.
Under the deal struck with Labor, Crown has also agreed to boost responsible gambling services, including employing two extra full-time responsible gaming liaison officers and an additional responsible gaming psychologist.
The idea of using the Crown College to retrain workers – currently the centre is mainly used by Crown staff and the hospitality industry – has been floating around for some time.
“This is another backflip from Daniel Andrews and Labor, but it is one we actually welcome,” Treasurer Michael O’Brien said.
Crown pays rent of $1 a year for its expansive Southbank site to the state government. The rent cost is to revert to a commercial rate after 2033. A government spokeswoman said the new Crown deal did not include any change to Crown’s lease arrangement.
In 2009, then opposition gaming spokesman Michael O’Brien, who is now Treasurer, said a social and economic impact assessment “should have informed the government’s decision whether or not to enter into the deal”, with Crown to increase its gambling capacity.
He said at the time the government was “playing catch up” in ordering the assessment after the changes had entered Parliament.
Then premier John Brumby talked down the impact of the Crown expansion on problem gambling in 2009 because it did not include more poker machines.
“The view that was put to us in Cabinet is that there is an issue [with problem gambling] if we were looking at more gaming machines [but] there is not an issue in relation to gaming tables,” he said.
The deal to extend the Crown licence from 2033 to 2050 also includes a clause that could trigger the government being liable to pay Crown compensation of up to $200 million for regulatory changes, including future problem gambling or smoking changes that have an adverse impact on Crown.
Treasurer Michael O’Brien said on Friday the latest Crown deal was “a modest increase in gaming product”.
He said this contrasted with Labor’s 43 per cent expansion Crown’s tables.
“It also preserves, rather than alters, regulatory arrangements while providing for the implementation of voluntary pre-commitment on gaming machines in 2015,” Mr O’Brien said.
He said the government had invested $150 million over four years on problem gambling initiatives. A spokeswoman for the Victorian Commission for Gambling and Liquor Regulation would not say if a social and economic impact statement would be required for the latest Crown deal.
On Tuesday Shadow Gaming Minister Martin Pakula said the compensation provisions in the new Napthine-Crown deal would not stop it from pursuing programs to reduce problem gambling.
“We will make our decisions about problem gambling solutions on their merits not in response to this poison pill the government has put in this agreement,” Mr Pakula said.
The Crown deal has drawn the ire of gambling reform activists. Anti-gambling campaigner Tim Costello called the decision one of the worst bipartisan decisions made in Victoria’s history.
“Labor and Liberal have profoundly let the Victorian public down. This destroys any plans for reforms,” Mr Costello warned.
Greens Leader Greg Barber, who had urged the Parliament to block the deal, vowed that the party would try and examine all aspects of the deal when the legislation hit the upper house.
“The more we learn about the casino deal, the worse it looks. Now we hear Labor have been negotiating with Crown on the side,” Mr Barber said.
Crown Resorts chief executive Rowen Craigie said Labor’s decision would help provide long-term certainty for Crown and the 8800 people who worked there.
“We are extremely proud that Crown Melbourne is Victoria’s largest single-site employer and contributes enormously to Victoria’s economy through taxation revenue, tourism and by supporting small business through the local supply chain,” Mr Craigie said.
“We look forward to working closely with both sides of politics to ensure that Crown Melbourne remains a landmark attraction and critical tourism infrastructure for Melbourne and Victoria well into the future.”