That SkyCity deal is sweet as. The law hasn't been traded, more pokies won't do any harm and now that the government's saying it might walk away from the deal, well, that doesn't amount to a backdown. Yeah right.

Economic Development Minister Steven Joyce did his own unique version of the 'Dead Parrot' sketch on Q+A this morning. Just as Michael Palin once memorably stood at a shop counter insisting that a dead bird was alive, Joyce argued that white was black when it came to the Sky City conventional centre deal.

The Sky City deal has got away on National in one of its rare political mismangements; it has the feel of the schedule four debate all over again when the government badly misread the mood of the country and was forced to backdown.

This time, it being a second term and with the Prime Minister having tied his flag more tightly to this policy, a backdown is not nearly as certain. But even if the government was to fail to seal the deal with SkyCity, it would not amount to a backdown. No, no. Joyce said:

It’s not a back-down situation at all. The government is interested in doing a negotiation and an arrangement which is fair to both parties – fair to taxpayers and fair to SkyCity shareholders. And if such a deal can be arranged, then that’s something we’ll put before the Parliament. If it can’t be done, we won’t be doing it. But it’s not a case of a back-down.

Which, of course, means a backdown is at least being considered. And it can only be called a backdown, given Key's repeated endorsement of what a good deal this is for the country and his decision to stall work into any other options once he knew SkyCity was going to tender.

This is a convention centre National has backed - and still backs, if the politics don't become too hard. What's more Joyce said this morning that an addition of several hundred more pokie machines - whatever the final number may be - would not "necessarily" add to this country's gambling problems. So, from that point of view, the only thing standing in the way of a deal is politics.

Yet the facts around pokies are not encouraging - they're the meth of the gambling industry, as the Herald has quoted. More than three-quarters of problem gamblers use them as their main mode of gambling... Around half of all pokie users are problem gamblers... And according to the Australian Productivity Commission each new gaming machine creates 0.8 of a new addict, which in turn affects 5-10 people around them.

For Joyce to hear such figures and reply that he does not see a "cost" in those extra gaming machines is surely akin to insisting that the world is flat. He would be on safe ground questioning the degree of the harm, but to deny any suggests a politician in denial.

Will a 20-30 percent increase in the number of pokie machines at our largest casino not add to the $2 billion New Zealanders already lose through gambling? Will it not create more addicts? And will more problem gamblers not be a cost to taxpayers in terms of the assistance we offer, the benefits required, the productivity lost and so on?

No, says Joyce. This parrot, he declares, is just sleeping. Pining for the fjords.

And just in case you were in any doubt about the depth of Joyce's denial, consider this exchange:

GREG                           "Yes, but let’s just back this up. If you hadn’t said... If you’d said to SkyCity, “No, we’re not going to change the gaming law. You can’t have any extra pokie machines. You’ve got 1600. That’s enough,” you wouldn’t have a deal. Is that right?

MR JOYCE                  There's no doubt about that. I mean, at the end of the day...

GREG                           So you have sold the law.

MR JOYCE                  No, it’s not selling the law, Greg. I mean, it’s basically saying you’ll alter the law to enable economic activity to take place..."

So... It's not selling the law, it's just altering it in return for economic gain. And this parrot is just resting.

I don't want to get to hung-up on that point, however. I'm all for governments looking for creative deals to boost our economy, and sometimes those may involve law changes. The problem is with this specific deal.

Phil O'Reilly once told me that the reason the unions buggered their argument against The Hobbit law change was because they didn't understand that this wasn't just another industrial relations dispute. We're proud of those films, they speak to our national identity, and we weren't about to lose them to Estonia. And he was bang on.

This time National has made the same mistake in reverse. Its MPs haven't understood that people don't feel proud about gambling and its associated problems and don't like favours for individual corporates (especially Australian ones).

So the government is left holding a parrot that, politically, is dead. It's a late parrot, it's ceased to be, it is no more.

The question now is how long it's willing and able to keep staring voters in the face insisting that the parrot is as right as rain.