Build a ‘dog’ and there’ll be consequences, says Labour leader as casino looks at options.

SkyCity could spend millions more on a convention centre than originally agreed as Labour threatens to cut the length of its casino licence if it builds a "dog".

Taxpayer money has been ruled out to help build the centre after construction cost increases meant the $402 million budget could no longer cover the design.

Economic Development Minister Steven Joyce has said the building could shrink by up to 10 per cent as a result of sticking to the original budget. But yesterday, he indicated that SkyCity could lessen any impact by putting up more cash.

Architects are also looking at other designs that will save money, such as using less glass.

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"We gave a number of up to 10 per cent to make sure that they were very clear that that was our limit on what we'd be prepared to do," Mr Joyce told the Herald.

If changes meant the number of delegates who could be hosted in the main exhibition hall came down by 200, for example, it would not be a concern, he said.

"Within the margins you could cope with a few things if there was a benefit in terms of the savings, and that meant they didn't have to cut back on the look of the place."

Mr Joyce conceded that a smaller convention centre would be less attractive to some groups and could result in missed business "at the margins".

Asked if he was hopeful SkyCity might soften any downsizing by spending more than the agreed $402 million, Mr Joyce said indications were that it wasn't off the table.

"They are already making comments in that regard, so, let's see."

But Labour leader Andrew Little said a government under his leadership would be tougher.

It would look at legislating to reduce the 28-year extension to the SkyCity licence, granted as part of gambling concessions given to SkyCity for building a $402 million centre.

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"If they put up a dog, then they're not going to get away with it."

The announcement on Sunday that no taxpayer funds would be used continued long-running negotiations between the Government and the casino company.

SkyCity had submitted a more-expensive design in December and said up to $130 million more was needed, because of increasing costs and design improvements. Before taxpayer money was ruled out, SkyCity chief executive Nigel Morrison had indicated that the casino would contribute only up to $10 million to the cost over-run.

A SkyCity spokesman said the casino was "very hopeful" that aspects of the design, such as the plenary and exhibition hall, would be left intact.

What's the deal

What is Labour threatening SkyCity with?

Andrew Little said yesterday that if SkyCity did not build an iconic and world-class convention centre, his party would consider legislating to cut its 28-year licence extension.

What was the deal?
In May 2013, the Government signed a deal with SkyCity for an international-standard $402 million convention centre. Increasing construction costs mean that if that budget is stuck to, the convention centre could be up to 10 per cent smaller than planned.

Will SkyCity meet its part of the agreement?
Mr Little insists a Labour government would be within its rights to cut SkyCity's licence, despite the fact that $402 million will be spent. That was because SkyCity had publicly stated the convention centre would be iconic and world class, and those statements and representations accompanied the written agreement. Economic Development Minister Steven Joyce said the deal was for an agreed-upon $402 million convention centre. Any Government that legislated over the top of such an agreement, he said, had to be "very, very careful".