Urgent Debates — Saudi Agri-hub—Auditor-General’s Report

I have received a letter from the Hon David Parker seeking to debate under Standing Order 389 the release of the report of the Auditor-General on the Saudi Arabia Food Security Partnership. This is a particular case of very recent occurrence for which there is ministerial responsibility. Given the high level of public interest in the matter, it warrants the immediate attention of the House by way of an urgent debate. I call on the Hon David Parker to move that the House take note of a matter of urgent public importance.

I move, That the House take note of a matter of urgent public importance. The only positive for the Hon Murray McCully in this report is that the report finds that he is not guilty of the crime of corruption. No money went into his hands, and he has been found not to have bribed anyone else. Beyond that, this report is an absolute indictment of the Government, its cover-up, and its poor standards. Indeed, the Auditor-General is very, very clear in distancing herself from the immorality—I do not say the morality; I say the immorality—of what has gone down here, and she says the use of a contract for services to resolve these matters was a decision made by Cabinet.

I comment below on the quality of the Cabinet paper process, not on the decision itself. The Government will turn up today, as it did with Skycity, and say that this report exonerates it. It does not. It lays bare an absolutely disgraceful stain upon the record of New Zealand. The Government has acted immorally, improperly, wasted millions of dollars, covered it up, lied to the Parliament, and lied to the public. It is only because of the very good services of a couple of journalists in particular that this even came to light.

This shabby sheep deal in the desert was exposed only because two journalists chased it down. The first was Matthew Hooton. Matthew Hooton ran a number of articles in the National Business Review saying that this was a shady deal that did not make sense. The only thing he knew about at the time was the then said to be $6 million cost of a farm in the desert, which was meant to be some demonstration farm of New Zealand agricultural expertise. He said it never made sense, he postulated that it was linked to trying to get a free-trade agreement with Saudi Arabia—an issue that the Government denied—and he kept digging and poking away at it. The National Government pretended there was nothing wrong.

Heather du Plessis-Allan, then at TV ONE, did an absolutely fantastic job of breaking this story. She ran a number of news items on TV ONE, she raised the question as to whether this was all as it seemed, and she put in a number of Official Information Act requests. She also approached me. I smelled a rat there. I do not normally fish in Parliament; I normally come with things that I can prove. But I came fishing, and on the day I came fishing with regards to payments in addition to the $6 million payment, McCully stood up on the tiles and told Heather du Plessis-Allan: “Oh, by the way, there’s another $4 million cash payment that we haven’t told you about.”

I came to this House and I asked questions about that $4 million cash payment, and Minister McCully stood up in this House and pretended that that $4 million payment was necessary, (1) to settle a legal risk, and (2) to pay for intellectual property. He denied that it was to facilitate a free-trade agreement with Saudi Arabia. He blamed the prior Labour Government. He blamed the prior Labour Government, and he said that I should be ashamed of myself for being part of that Government and that Phil Goff should be ashamed of himself for causing that $4 million payment to Mr Al Khalaf. That is what he told this Parliament, and that is what he told journalists.

The Labour Party sought release of our Cabinet papers from the last Government relating to the extension of the ban on the export of live sheep to Saudi Arabia for slaughter, because Mr McCully and the National Government were saying that there was evidence in them to back up his assertion that it was our fault and that he was paying off a legal claim that we had created. The National Government then actively supressed the release of those papers and breached the very Cabinet convention that is meant to act for the preservation of the national interest.

After weeks of the Government pretending that we could not see the full amount of those Cabinet papers, disclosing to the media redacted copies of them, and pretending that in the redacted parts there was evidence of some poor practice by the Labour Government, I released them, because the Government was in breach of that convention, and proved that those allegations that it was us who had somehow created a legal risk were wrong.

Of course, it was always legitimate for the past Government to ban the export of live sheep for slaughter. We now all know that that was initially because of the death of sheep in transit and that some of those processes have improved substantially, but that it was expanded or extended because of the evidence that was on TV about inhumane practices in Saudi Arabia after those sheep landed, when they were slaughtered in very inhumane ways that would not be allowed if they were slaughtered in New Zealand before they were shipped as carcasses.

Those practices included stuffing them in boots, tying them up, and cutting the tendons of their legs so that they could not run away. There was great justification for the then Minister of Agriculture under the Labour Government to extend that ban on the export of live sheep for slaughter, and the current Government, under the then Minister of Agriculture, acted entirely appropriately when the National Government itself again extended the ban on the export of live sheep for slaughter, not once but twice. Each time it did it, it acted legally. Therefore, it was always a fiction that there was a legal claim faced by the Government that justified the $4 million cash payment.

What has the Auditor-General said? And if I have got time, I am also going to take the House through some of the papers. The Auditor-General said “I share many New Zealanders’ concerns about the arrangements. I found significant shortcomings in the paper put to Cabinet in support of the decision to enter into the Saudi Arabia Food Security Partnership.” on page 5. Again, on page 5: “In my view, settlement of a grievance was provided under the guise of a contract for services.” “Guise”—i.e., a disguised payment, which was to facilitate a free-trade agreement and to settle these grievances of Sheikh Al Ali Khalaf, which had no basis in law. Then she goes on to say: “Importantly, the contract does not specifically reflect the settlement component relating to the grievance.”

That has been one of our points all along—that these documents misrepresented the true position. The Minister has denied it. He has been found out, and if we have now reached the point in New Zealand where the standard of conduct expected of Ministers is so low that they have to be found to be guilty of a crime before they are forced to resign, that is a terrible state of affairs in New Zealand—a terrible state for New Zealand—because what is the truth at the heart of this is that the incompetence of the Minister has been shown up. We still do not have the free-trade agreement. The incompetence of the Minister has been shown up. Many millions of dollars have been wasted on a farm in the desert. The lambs died. Rather than showcasing New Zealand’s expertise, that has sullied our reputation. What else has he done? Well, of course, he has covered that up, as I have already addressed, and he has misled Parliament and the public.

The contract for services was intended to conceal the nature of the arrangement. That is what we have said, and that was what is imprudent. What does the Auditor-General say further? And I am only up to page 5: “This lack of transparency, both at the time of the decision and subsequently, has led to the concerns from the New Zealand public about the nature of the payments made. To date, explanations from Ministers or officials have not resolved those public concerns.” That is quite true. In fact, until now, they have actively tried to cover up the true nature of these transactions.

Then, as I have already said, the Auditor-General says: “The use of a contract for services to resolve these matters was a decision made by Cabinet. I comment … on the quality of the Cabinet paper process but not on the decision itself.” She is making no comment on the morality of paying off a disaffected multimillionaire Saudi sheikh—millions of dollars in order to facilitate a free-trade agreement with Saudi Arabia. The Labour Party is willing to make that call. That is unprincipled and wrong. It is not something that the New Zealand Government should do.

The Auditor-General then says: “I found some significant shortcomings in the Cabinet paper, including that it: did not clearly explain that the Al Khalaf Group would own the goods and services costing the New Zealand Government $6 million;”—it is a bit of a miss, is it not, Mr McCully? It “did not identify how the $10 million”—

💬 Grant Robertson: Making it up.

That was the $10 million in addition to the $4 million—sorry, the $10 million figure was made up. It was a figure that rose to $11.5 million. We actually know that that $11.5 million included flying sheep on Singapore Airlines to the other side of the world, to a farm in the desert where most of the lambs died, and it was meant to be a model farm of New Zealand practice.

She also says that the Cabinet paper “signalled the risk of a claim against the Government based only on the $20-$30 million figure that the Cabinet paper said was suggested by the Al Khalaf Group (there was no assessment by Ministry officials of the substance of that legal risk);”. I and the media have been fighting for a year—a year—to prove that point, and the Minister has resisted every attempt. I have got, under the Official Information Act, notes where the Chief Executive of the Ministry of Foreign Affairs and Trade (MFAT) was schooled on the obfuscatory answers he was to give at the Foreign Affairs, Defence and Trade Committee to deny that. The Government dragged the ministry into this cover-up as well.

The Auditor-General says further: “I was surprised that it was decided to use a contract with a private individual’s business interests to resolve a diplomatic issue between governments. It is difficult to reconcile the words of the contract with the unstated objectives,”—

💬 Grant Robertson: That’s right. That’s the cover-up.

It is the cover-up. Then the Auditor-General ends by saying, look, we are not a corrupt country, but transparency must be assured in order to avoid us being a more corrupt country.

Two other points. The report does not consider how it was that McCully got his old mate Alex Matheson—who worked for him way back when and was working for the Ministry of Economic Development overseas and somehow came to be working for the Rugby World Cup for McCully, then, at the end of that road, somehow he was appointed by McCully as a sort of roving consular figure in the Middle East—to sew up this deal. He was his inside man, who sewed this up. How is it that MFAT allows itself to be so manipulated by its Minister that it allowed that to happen? There was no consideration of how Michelle Boag, the former president of the National Party, somehow inveigled herself into the deal.

This is, I think, a disgraceful episode. I personally feel misled by Mr McCully. I have never said that he took a cheque or that he had profited financially. I think it is a very, very narrow view of what is right and wrong if he is judged by anyone on the basis of whether he breached the Crimes Act in terms of corruption. The truth is that this was a disreputable waste of money, which has been covered up for a long, long time, and it would not have come to the attention of the public had it not been for Matthew Hooton and Heather du Plessis-Allan, whom I think we should be celebrating as actually having done very good investigative work on this occasion.

Can I also thank the Speaker for enabling the House to actually bring this to a head in a way that caused the Auditor-General’s inquiry. If it had not been for the thorough processes that we have around question time, again, the Government would have avoided responsibility for wasting $11.5 million of taxpayer money, including a $4 million cash payment to Mr Al Khalaf.

We know it was a compensatory payment, because there are other papers, which we finally got under the Official Information Act, that showed that Mr Khalaf’s representative, Mr George Assaf, said that they needed compensation. Why would a Government ever think that you should buy your way into a free-trade agreement with someone who is connected in Saudi Arabia—with the then Minister of Agriculture getting out of the way—and, effectively, pay him off because of his grievance, which was not substantial in law, in order to get a free-trade agreement with the Gulf states?

I want to take the opportunity today to make some brief remarks in relation to the release of the Auditor-General’s report today. To those members of the public who listened to the contribution by Mr Parker and who feel confused, can I simply say to them that they should read the report. I cannot do justice to it in a few remarks in the House today; I will just make a few points. I do say to those who are concerned about this matter: read the full report. The best bits were not, in fact, quoted to the House today by Mr Parker.

It is an important report, and I welcome it because I was on the receiving end of some very colourful allegations by Mr Parker and by some of his fellow travellers, who decided to use words like “bribery”, “corruption”, “facilitation payments”, “dodgy”, etc., to describe a genuine attempt by the Government and by senior ministry officials, led by myself, to deal with a situation that we inherited. This is not a situation that the National-led Government created for itself; it was a situation that we inherited from our predecessors. Mr Parker can obfuscate all he likes, but anyone who reads the Auditor-General’s report can draw their own reasonable conclusions about the situation that was inherited by me, by my then colleague Tim Groser, and by members of this Government.

The first reason that I am pleased to welcome this report today is that the allegations of bribery and corruption made by Mr Parker and others—very serious allegations to make in a constitutional democracy like New Zealand—have been shown to be completely baseless. After full cooperation from members of the Government, members of the New Zealand Public Service, and all parties involved in this interesting period of recent history, the Auditor-General has said very clearly, and I quote from page 54, “We found no evidence of corruption, bribery, or a facilitation payment … The arrangements entered into were a lawful use of public resources, and public money was spent with appropriate financial authorities in place.” That is exactly what the Auditor—

💬 Grant Robertson: Read the next paragraph—read the next paragraph.

I am going to talk about the next paragraph. The Auditor-General has made a full-frontal finding that the very colourful, defamatory accusations being made by some members of this House are simply baseless and false.

Can I say that nobody listening to this debate should be surprised by that. This was not a process that was conducted by three or four people in a dark room; this was a process that involved months and months of discussion, involving the most senior officials in the Ministry of Foreign Affairs and Trade—senior officials from the Middle East and Africa division, senior officials from the trade division, the most senior legal people available to the Ministry of Foreign Affairs and Trade, and, indeed, external legal advice on aspects as well. It should come as no surprise to anyone that there is a full-frontal finding by the Auditor-General today that there was no bribery, that there was no corruption, that there was no facilitation payment, that there was a set of arrangements that were “a lawful use of public resources”, and that “public money was spent with appropriate financial authorities in place.”

I want just to go back to the Cabinet paper that has been the subject of some comment by the Auditor-General—and I will make some references to that in a minute—and just read the first paragraph, because it is important to remember the history: “This paper updates Ministers on progress in resolving a serious bilateral relationship issue with Saudi Arabia that poses a major threat to New Zealand’s trade and economic interests.” For the past 4 years this issue has spilled over into the wider Gulf Cooperation Council (GCC) and has been asserted by the GCC to be the only obstacle to ratification of the New Zealand - GCC free-trade agreement (FTA). This was an FTA that was fully negotiated—completely negotiated—by negotiators on both sides, and the Saudi Government put in place a block on further interaction, because of offence that had been caused by the history, which I invite members who are interested to read in the Auditor-General’s report.

It is true—and I am going to be more even-handed than Mr Parker and concede—that there are some areas of this history that the Auditor-General gives the Government less than approval for. The report does suggest that some aspects of this process were less than perfect. It describes, first of all, the use of a contract for services as “problematic”. Can I say to the House today that I agree with that—I agree with that. In fact, what I would also say is that there were simply no non-problematic responses available to the Government. It is notable that the Auditor-General makes no suggestion as to what a non-problematic course of action available to the Government might have been. Can I be quite clear that the course of action that could easily have ensued, one of simply letting matters fester even further, would have been even more problematic to the Government, more problematic to New Zealand, and more problematic to our long-term trade and economic interests. That is why members of the Ministry of Foreign Affairs and Trade and I took the steps that are outlined carefully in this report.

As Mr Parker has told the House, there is a comment in the report that suggests that additional analysis should have been provided in the Cabinet paper that went to the Cabinet committee and to Cabinet. I want to say, first and foremost, that I am not going to comment on those findings of the Auditor-General. It seems to me to defeat the whole purpose of having as independent an exercise as this if people are simply going to give it their own analysis and spin. I just want to say, to the extent that there are matters that the Auditor-General suggests could have been undertaken better, and to the extent that there are procedures or processes that could have been improved, that as the Minister responsible, I will that take on the chin. I believe that we did our best in some very difficult and some very trying circumstances. To the extent that there were some blemishes in the process along the way, they have been identified by the Auditor-General, and those comments should be treated with respect, and I certainly will do so.

The most important point that I want to make to the House today is that the objective that the Government set in embarking upon these proceedings has been substantially achieved. I would refer to a press release here, which was released by my colleague the Minister of Trade on 29 September in the course of a visit to Saudi Arabia, which is headed “New Zealand & Saudi seek early completion of GCC FTA”, and accompanying this statement is a joint statement signed by Minister Todd McClay and by the Saudi Arabian Minister of Commerce, jointly committing the two Governments to the early completion of the GCC FTA. That visit followed one that I myself had undertaken earlier, and it follows interactions I have had with each of the other five Governments of the Gulf States to confirm that in this matter, having been resolved to the satisfaction of the Saudi parties, and particularly to the satisfaction of the Saudi Government, the objection has been removed and the issue of the free-trade agreement is now back on the rails and will take its proper course.

Those who do not take an interest in these matters may be surprised to hear that this is a very important market to New Zealand producers today. This is going to be a much more important market to New Zealand in the coming years, not just because the Gulf States themselves are hugely important, not just because they are natural partners—in that they have significant funds but a significant lack of arable land and water, and that their No. 1 priority is food security—but also because this is the gateway to the African continent, where there is going to be an explosion of trade and economic opportunity for New Zealand business in the years to come. For any New Zealand Government simply to walk away from a frozen free-trade agreement negotiation because it was difficult to resolve would not have been a responsible course of action. It was not one that I was prepared to contemplate.

So to the extent that there are criticisms of the process that are levelled in the Auditor-General’s report today, I accept those criticisms as the Minister responsible. To the extent that there is credit, now or in future, that is to be distributed as New Zealand banks the gains that come from the completion of the free-trade agreement and the enhancement of economic and trade opportunities with the Middle East and with Africa, I hope that some of that credit will come my way as well.

Something maybe legal, but that does not mean it is not dodgy, and that does not mean it is not unprincipled. In other words, being found not guilty is not the same as being innocent. It is a bit like investing in cluster munitions through a distant legal mechanism. That is legal, but it does not make it right. I am pleased that the Minister of Foreign Affairs has chosen to front in the House today, to this report. It has been a long time coming. David Parker and I wrote to the Auditor-General on 28 May last year, so this report has been 18 months in coming. It finds that no laws were broken, but it also finds that there is a litany of incompetence, of unprincipled and rogue behaviour, of a cavalier approach to the use of public funds, and a complete lack of transparency. As David Parker said in his opening remarks in this debate, surely we have higher standards for our Ministers than merely not being crooks. Surely we hold them to standards of competence, that they observe due process, and that they are transparent, and that they use public funds wisely. It is quite an extraordinary picture that has emerged through this report. I want to pick up on a few specific points within the report.

First of all, the Auditor-General finds that the contract for services was used to transfer value to the Al-Khalaf Group in order to (a) settle a grievance and a very vague claim for compensation—this is on page 8—and (b) to resolve a diplomatic issue that was perceived to stand in the way of a trade deal, as outlined on page 9. There does not seem to have been a clear finding as to why compensation was dressed up as services. The Auditor-General refers to this, on page 9, as “a convenient mechanism” and that Mr McCully thought that compensation would need to be scrutinised by “a plethora of lawyers and bureaucrats” and so he wanted to avoid it. This is on page 32 of the report. Because of this guise, there was no analysis of the risk of a legal claim. There was not a clear explanation to Cabinet of what was going on. The contract does not contain any settlement wording at all. The Auditor-General refers to these as “significant shortcomings”. She says that they are surprising, and this is a failure to be transparent. It is worse, I think, that a Minister is using a sham device to avoid proper process and scrutiny.

There are some specific quotes that I would like to pull out. The Auditor-General says: “I was surprised that it was decided to use a contract with a private individual’s business interests to resolve a diplomatic issue between governments.” I am just going to restate that. It is quite an extraordinary statement: “… it was decided to use a contract with a private individual’s business interests to resolve a diplomatic issue between governments.” She goes on to say: “It is difficult to reconcile the words of the contract with the unstated objectives, which included resolving a complex diplomatic issue and removing a perceived obstacle to the signing of the free trade agreement. The contract for services was a convenient mechanism by which the allocated $10 million, later $11.5 million, was put towards achieving those unstated objectives. It does not tell the full story.”

That is an extraordinary statement about the behaviour of any Minister of the Crown, operating on behalf of the Government of New Zealand, in our relations with private individuals and Governments overseas, and it is absolutely intolerable, on behalf of the New Zealand Government. An amount of $4 million was paid to a Saudi businessman because he asked for it. The Cabinet paper signalled that the risk of the claim was based only on the $20 million to $30 million that the Cabinet paper said was suggested by the Al-Khalaf Group itself. No one who was qualified to do so appeared to have considered whether the legal risk that Mr Key and Mr McCully used in this House to justify the payment was at all legitimate. Nobody tested that. The payment was based on the unqualified assertions made by Mr McCully.

The Auditor-General goes on to say that in the Cabinet paper there is the promised $3 billion worth of trade in 5 years with Saudi Arabia and the Gulf States, and that there is no evidence for this claim in the Cabinet paper. There is simply an assertion. The Auditor-General has not been able to find any evidence to back up that claim anywhere else. No one has tested Mr Al Khalaf or the Gulf Cooperation Council’s claims that this was the one thing that was standing in the way of the free-trade agreement. That, to me, is extraordinary; it is utterly extraordinary. This is based on absolute hearsay. The fact that the free-trade agreement is still not signed suggests that it was not the only block. The report also says that Treasury was supposed to have oversight of the project, and there does not yet seem to be any evidence that it did.

At the very least this is clear incompetence. An amount of $8.7 million of public money has been spent, against a budget of $11.5 million. The report says that it is not clear on what basis those amounts paid were arrived at. These numbers just seem to have been plucked out of the air, in the Cabinet paper. In terms of competence, who thought that shipping South Island ewes to the middle of a Saudi desert was a good idea? Is anybody surprised that 75 percent of the lambs that were born there subsequently died? The report also says that there is a total lack of transparency. The Auditor-General says that the contract does not tell the full story, and that to date, even at the date of the publication of this report, Ministers and officials have not resolved those concerns about the lack of transparency.

Although Mr McCully and the Prime Minister and others will stand up and say that this report somehow fully vindicates their behaviour, on the basis that no laws were broken, the behaviour exhibited, led by Mr McCully, is clearly incompetent, unprincipled, rogue behaviour. It is not transparent. I have to say that it is extraordinary to me that he continues on in his role as a Government Minister. I think that is intolerable and he should stand down immediately. The Prime Minister says that this was a creative solution. Well, I have to say that I started my career in one of the world’s largest accounting firms and we referred to “creative accounting” as things to be avoided at all costs, because that is not the basis of a society or a Government on the rule of law, and we have higher standards for the behaviour of our Government than that. Mr McCully needs to go. Thank you.

Well, I am glad we have had this opportunity to debate this matter today. It has been a long time coming. In the short time that they have had it available to them, the media have had a chance to look at this report from the Auditor-General, and I think the headline that I have got in front of me pretty much sums it up. It says “ ‘Shortcomings’ but no corruption in sheep deal—Auditor-General”.

That behoves us to ask the question: what is corruption? We have heard—the Minister has said and members have made comment—that corruption is something that in this case, if it went to court, legally, the people who have had the finger pointed at them would probably get off. But it goes beyond that, because if they are significant shortcomings, and if an issue like this does not pass the public-interest test—if it does not pass the “Will this make the front page of the Dominion Post?” test—if it is corruption of thought, if it is corruption of behaviour, if it is corruption of morals, and if it is corruption of the established, ethical ways of doing business, is that still corruption and is that something that we want to countenance? Is it something that we want to allow this nation and this Government to simply get away with because that is a way of, effectively, covering something up?

There is an awful lot that has been said in a very short hurry about this, and I think many of us probably have not had a great deal of time to digest it in detail, but when there are statements that are made by someone of such unimpeachable integrity as the Auditor-General—when that person says “I was surprised that it was decided to use a contract with a private individual’s business interests to resolve a diplomatic issue between governments.”, that is something that we have to take on board and we have to take very seriously, because, in the grand scheme of things, resolving diplomatic issues between Governments is not something that is done, on the face of it, by the payment of money between Governments and private business individuals. When we boil all this down to brass tacks, essentially, that is what that comes down to.

What this Government wanted was a free-trade deal with the Gulf Cooperation Council, and what was standing in the way of it was a Saudi businessman who was annoyed—understandably, perhaps, from his point of view—at losing lots and lots of money from the ending of the live animal trade from New Zealand, which we as a sovereign nation put a stop to on ethical grounds because of the conditions faced by livestock as they were transported from this side of the world to the other. That all came about when something like 5,000 sheep died on a ship on the way from Australia to the Middle East, and fingers can be pointed in all sorts of directions as to who or what was ultimately to blame for that. But it threw a spotlight on a trade where tens of thousands of animals were being transported from what we like to think of as being civilised places for slaughter to places that are quite frequently accused of being uncivilised places for slaughter, and the conditions in which they were transported gave measure to that lack of civilisation, never mind what happened at the other end when they arrived.

We had put a stop to it. Money was lost. People, obviously, at the other end of that deal were experiencing much chagrin at losing money and they brought political and financial influence to bear on the political system at their end of the matter, and there we came to an impasse. So in order to break this impasse, a deal was reached and it was a deal that many of us would regard as being, ethically and in terms of business morals, corrupt. That involved, as it says on one of these many pieces of paper I have in front of me—

💬 Hon Members: Take your time.

—thank you very much—the payment of something like $11 million worth of cash, livestock, and agricultural equipment to a Saudi livestock importer, and that, we are told, supposedly broke the impasse. But I have to call that into question too, because are we, in fact, any closer to resolving this deal, which was brought to a halt by the end of our live sheep exports, or, at the end of the day, are we still going to have to turn around and, effectively, bend over and lift our prohibition—because it is not a prohibition in law. It is not a ban in law.

When the Animal Welfare Act was re-examined a couple of years ago by this House, we did not enshrine the ban on live animal exports other than for the likes of bloodstock. We relied on the convention that had been established since the prohibition was put in place. It is still legally possible for us to export livestock to that part of the world. Do we rely on that, or are we going to see the resumption of shipments of live animals from this country to parts of the world that do not have the same ethical standards that we do in terms of their treatment of animals, in terms of the operation of their abattoirs, in terms of the way animals are slaughtered, and in terms of the way animals are treated? Have we essentially sold our soul for the paltry sum of $11 million to placate one individual—

💬 David Seymour: It’s not poultry.

—$11 million, Mr Seymour—in the scheme of New Zealand’s sheep exports, and our meat exports overall, which ground this economy in total? Yes, $11 million is a paltry sum. It is a paltry sum, Mr Seymour, and I think you really should take that on board, because, Mr Seymour, some things are actually more important than bottom lines and some things are more important than paying lip service to concepts such as ethical behaviour. Sometimes corruption is corruption, even if it is something that would not lead to a conviction in a court of law. If it is immoral, if it is unethical, and if it is business practice that we as a nation do not want to be associated with, then it is a very paltry sum for selling our soul, Mr Seymour.

The report goes on to say that “It is not clear on what basis the amounts paid to the Saudi Arabian investor’s company under the contract were arrived at.”, so there is a complete lack of transparency throughout this entire matter. There has been from the beginning, and New Zealand First was saying so a long time ago. Back in May 2015 we said that the deal was “a new low in New Zealand diplomacy”. “A disgrace” and “borders on bribery”, said our leader, the member for Northland, the Rt Hon Winston Peters. He then said: “New Zealand has been successfully blackmailed by two highly connected Saudi businessmen who have said ‘pay up or else your free trade deal is sunk’. We are paying for their business decisions. That opens up a Pandora’s Box of potential claims bearing in mind agreements like the Trans Pacific Partnership Agreement (TPPA) now being negotiated.”

If this is something that the Auditor-General can discover in looking into one single deal like this, what on earth are we going to find when we eventually get to the behind-the-scenes negotiations that went on for the Trans-Pacific Partnership agreement, which, depending on the outcome of the US election, may or may not happen. And that may be a very good thing.

Going back to before the 2008 general election, which is slightly after this matter came to a head, we still have not been told what promises were made by senior National Party figures to George Assaf of Awassi Ltd, and especially to the Saudi Minister of Agriculture, who visited Mr Assaf’s Hawke’s Bay farm on 16 July of that year.

There is so much that is left unanswered by this report and by the questions that have arisen as a result of this report that we are almost at a point where, although we have to accept the findings of the Auditor-General because we do not call the integrity of the Auditor-General into question—I think that office has demonstrated over the years that it is above impeachment in that regard—it is quite likely that we are probably going to have to have a full commission of inquiry into this entire matter because it is rotten to the core. That is obvious to everyone. It is obvious to the average person, it should be obvious to every member in this House, and it is going to be obvious to the public. They are going to be asking those questions, and they deserve to have those questions answered. Thank you.

That was a fascinating contribution from Mr Prosser. It was more pitiful than his usual contributions, because in the space of less than 10 minutes we heard that this involved selling our souls, corruption, a new low, bribery, blackmail, and rotten to the core. It seems that rather than reading the report of the Auditor-General, he has opened Roget’s Thesaurus to find the most colourful words that he could before he gave us that rather sad and pitiful effort.

Frankly, Mr Shaw was just as bad, because in the space of a few minutes—we did not get the full speech time from him—we heard it was intolerable, a litany of incompetence, rogue behaviour, dodgy behaviour, not transparent. Well, let me say to honourable members that if there is an urgent debate in this House, then I suggest it is important to read the document and have an understanding of the transaction and have an understanding of the findings—not dive for a dictionary or a Roget’s Thesaurus, come up with the most colourful phrases you can—and cut to the chase and have a cold, hard, analytical analysis of what exactly went on.

Throughout this process we have had exactly the kind of florid rubbish that typified Mr Prosser’s speech, and also Mr Shaw’s speech, rather than focusing on the facts. I know that focusing on the facts is something New Zealand First is particularly bad at, given its extraordinary performance in question time yesterday, but that is precisely what I want to do. I want to say something first about the process, because there have been a number of complaints from Mr Parker and others that this report has taken too long to get out, that people have not been cooperating, and that lawyers have got involved.

The process that was followed by the Auditor-General in this matter was perfectly standard. It has been adopted whenever there is an inquiry that those who could be the subject of criticism have the draft report given to them and they have an opportunity to make a comment for natural justice reasons. All that sort of work has taken a considerable amount of time, and now the report has come out. The critical thing about the report—and please, Mr Prosser; I suggest to him that he listen—there is no evidence of bribery, corruption, or facilitation payments. The report finds that all public money was spent within necessary financial approvals. That is the issue that the Auditor-General was asked to reflect on and report on.

💬 Clayton Mitchell: That you can even stand there and try to defend it shows how out of touch your moral compass is, Mr Finlayson. It’s a disgrace.

For the benefit of the big mouth from west Auckland, that is exactly what the Auditor-General—I am sorry, it was not him; it was the fellow from Tauranga. That is the point that has been established beyond doubt by the Auditor-General: there is no evidence of bribery, corruption, or facilitation payments.

What is also clear is that the National Government, in 2008, inherited a problem that carried with it major diplomatic, economic, and legal risk, and in his contribution this afternoon Mr McCully has spent some time addressing the diplomatic and the economic risk. What I would like to do is briefly touch on the legal risk, because the legal risk is pretty clear for anyone to see. What if, for example, a proceeding was commenced in the Saudi Arabian courts against the New Zealand Government? Would we have the benefit of sovereign immunity? What would the cause of action be? Would it be determined by Saudi Arabian law or New Zealand law? These are all the sorts of questions that a reasonable person, when analysing legal risk, would take into account in determining whether or not a matter should be settled.

I can recall, many years ago, as a litigator, being involved in a case where a New Zealand company was sued in Texas, in Harris County District Court. No one paid too much attention to it until they realised that the law that would govern the particular cause of action, which was breach of confidence, would be Texas law, and that it would be heard before a jury presided over by a judge who had been elected in the Republican landslide and was a probate lawyer. So all those factors were brought to mind when determining what exactly the legal risk was, and, even though the cause of action was flaky, a decision was made that because of the legal risk of litigating in Texas in a difficult situation, there needed to be a settlement.

💬 Clayton Mitchell: What about the price of avocados in China?

That kind of thing happens all the time when one is dealing with litigation in foreign parts. The member interrupts: “Well, would that apply in China?”. Well, of course it would. You would need to assess what would happen if you were litigating in China. These sorts of things happen all the time. There needs to be a mature assessment of legal risk, and that is exactly what has happened. When one looks at the legal risk—which I, as a litigator, thought was blindingly obvious—and one also looks at the issues of diplomatic and economic risk, then one is led to the need to sort this matter out as quickly as possible.

Linked with legal risk, for example, is that if the case was held up in the Saudi Arabian courts for a number of years, that would of itself have infected our relationship with Saudi Arabia and caused immense economic harm of its own. I know that Mr Prosser does not like the facts. He prefers to stand up and give a B-grade theatrical address relying on words like “corruption” and “bribery”, but, at the end of the day, they are serious allegations. He is protected by absolute privilege in this place, but one has got to come up, for one’s own credibility, with a few facts, and facts and Mr Prosser do not necessarily go hand in hand. Vague, immature waffle and Mr Prosser go hand in hand.

So that is the analysis of the legal risk. That is why there needed to be a solution to this matter, one that incorporated addressing the threefold problems of a diplomatic risk, a legal risk, and an economic risk, as a result of which Mr McCully—I believe, quite properly—said this matter needed to be sorted out, and reached a conclusion. Mr McCully has stood up in this House this afternoon and acknowledged that maybe the process was not A-grade, and he took that on the chin as one would expect him to do. There are matters that are raised in the Auditor-General’s report that all Ministers need to reflect on: to dot the i’s and cross the t’s—fair enough.

But I come back to the core issue here. After all the months, in this House and outside of this place, and in press releases, of allegations of bribery and a litany of corruption—all those sorts of things—what do we find from the Auditor-General? There was no evidence of bribery, corruption, or facilitation payments. At the end of the day, after all the purple prose, after all the hyperbole, the facts do not support what the Opposition has been saying for a year.

Quite frankly, at the end of the day, this Government, in 2008, inherited a mess. It needed to address the various risks; it addressed the various risks. Maybe, in terms of process, things could have been done better, but there was no finding of bribery or corruption. So my suggestion to Mr Prosser is that it is very important to look at the facts when determining this matter. It would help, when we are debating a report in future, if he has actually skimmed over it, read the summary, or had the summary read to him, because these are important issues, and one is dealing with the integrity—

💬 Hon Member: He’s insulting someone. He’s on fire again.

I am sorry to pick on Mr Prosser, but it was a pretty lousy contribution. At the end of the day, what Mr McCully did in terms of process could have been better, but in terms of substance he needed to address a very tricky issue and he did so. Quite frankly, I think members who blandly and eagerly toss around phrases like “bribery and corruption” owe Mr McCully an apology.

As Attorney-General, you have to stand up every now and then and give these sorts of speeches in Parliament where you know deep down in your heart that there is something deeply wrong. That sounded a lot like a lawyer defending somebody he knew was guilty and was going down, and he had to give him the best send-off that he could. That is what it was—it was a send-off.

The risk here is about New Zealand’s reputation. That is what it is. We have a reputation for transparency, for honesty, for non-corruption, and Mr McCully has sullied that reputation. It is one of the reasons why our ranking by Transparency International has gone from No. 1 to No. 4. It is because Mr McCully has used this backroom, creative accounting—creative solution, as the Prime Minister calls it—but it is more about corruption in the minds of New Zealanders when they hear this. This is a backroom deal. It is one of Mr McCully’s loose, hip-pocket, avoid scrutiny at all costs type of remedies for a problem that actually does not exist.

Let us start with one major—one major—fallacy that has been brought up not only by Mr McCully but by the Attorney-General today that somehow the Government inherited this problem. It did not inherit this problem. We banned live sheep exports in 2004 when 5,000 sheep died. There was no public appetite, no public appetite whatsoever, for live sheep exports from New Zealand to around the world. That is the reality. The New Zealand Government, that Government, in 2009 reaffirmed that there were going to be no live sheep exports and it did it a second time—two times it reaffirmed that, and Mr Key said himself that there was no appetite in the New Zealand public for the resumption of live sheep export. That—that—is fact, so do not put it on this side of the House. They agreed with it, and they know that the public is not behind them on it. So let us just get that right out of the way from the very beginning.

The Attorney-General talked about this purple prose. He did mention the word transparency. Well, let us read what the Auditor-General said about transparency: “This lack of transparency, both at the time of the decision and subsequently, has led to the concerns from the New Zealand public about the nature of the payments made. To date, explanations from Ministers or officials have not resolved those public concerns.” The people do not believe the Government. Let us go back and remind ourselves what actually happened here. What actually happened? Six million dollars was paid to the Al-Khalaf Group to set up an agricultural hub in the middle of the Saudi desert—the middle of the Saudi desert. It was a disgrace. Rather than highlighting New Zealand’s agriculture, it was a new low—a new low—and $4 million was paid directly to the Al-Khalaf Group. Then we put 900 pregnant ewes on a Singapore Airlines flight and flew them to the hub where 75 percent of those lambs that were born died. My God, if New Zealand wanted to advertise itself as an agricultural powerhouse, you could not do any worse to its reputation than that.

That was Mr McCully’s big, grand plan. Why? Let us ask the reason why we did that. Well, the Attorney-General just explained that it was because we were going to be threatened with a suit of $30 million—and to just accept that. Except that we had absolutely—absolutely—no evidence that that was going to happen. The Ministry of Foreign Affairs and Trade (MFAT) has yet to come up—has yet to come up—with any sort of evidence that shows that that was about to happen. The Al-Khalaf Group—let us ask them. They said no, they were never intending to sue. They were never going to sue. Treasury was not informed about what this payment was and what it was for and why it was being handled. There were absolutely no grounds that we were going to be sued, and even then it was $13 million. Yet we, New Zealand, our taxpayers, our hard-earned tax money was handed over to Mr Khalaf in that ridiculous way—in that ridiculous way. So that is the first reason. That is the first reason why we paid over $11.5 million of taxpayers’ money to a shonky backroom deal that Mr McCully came up with.

The second reason was that we were about to get a free-trade agreement, which, of course, has not happened. We have not yet got a free-trade agreement. There is lots of purple prose about how it is imminent and how it is coming. We do not know anything about whether Mr Al Khalaf was responsible for the progress or whether that progress might have happened in any case. If we are to believe Mr McCully, this is about Mr McCully paying a Saudi businessman a large sum of money in order for that Saudi businessman to then put pressure on the Saudi Government to enable us to have a free-trade agreement. So what does that sound like to you? What does that sound like to people in New Zealand? That is the sort of thing that goes on in other countries, but I did not think it would go on here in New Zealand. I do not care what the Auditor-General says. That to me sounds like her definition of a bribe that she has laid out in the table in this report. That is what it sounds like to me.

In addition to that, let us go through the Cabinet paper that Mr McCully’s office—as opposed to the Ministry of Foreign Affairs and Trade—put together in its backroom. All of these things were not answered in the Cabinet paper, yet we agreed to hand over the money. It did not identify how the $10 million figure was arrived at. Why not $20 million? Why not $5 million? Why not $3 million? Who knows? It was just a number that Mr McCully dreamt up. It signalled that the risk of a claim against the Government was based on $20 million to $30 million, but we do not know whether it was going to be $20 million to $30 million, $100 million, $2 million, or, as I have just said, whether it was unlikely to ever have happened. It did not include any analysis about whether there were any other potential obstacles about getting a free-trade agreement. Maybe there were other things. It actually happened to go down the tubes at around the same time as the global financial crisis, and we know that was a factor too. It identified that New Zealand exports could double with a free-trade agreement, but without any analysis about how it could double. The Auditor-General said: “Based on these … shortcomings, I am concerned at the lack of robust analysis and the quality of information that was provided to Cabinet on this matter.” Mr McCully had this creative solution but had absolutely nothing behind it. It was a shambolic shambles of a document. You have only to read it to think: “I don’t know how that got through the Minister of Foreign Affairs. I expected better from their lawyers and their people.” This did not even go through them; this came from Murray McCully’s office straight into Cabinet—straight into Cabinet—without going through the pre-Cabinet committee meetings.

This is a disgrace. It puts New Zealand’s reputation at a low ebb. It has circulated widely that somehow New Zealand, rather than being a transparent, open country that would never resort to payments to business people in order to get favours, has done exactly that—has done exactly that. I think it is a real shame, and if you want to pick the eyes out of this and say that nobody was corrupt and nobody paid bribes and nobody benefited individually, except for, obviously, the Al-Khalaf Group, and Murray McCully did not pocket any money—I did not expect that it would find that, but what it has shown is that this was a shambles. It was an utter shambles, and the Government should actually be ashamed of itself that it has got this far. It has brought great discredit to New Zealand’s reputation.

The events that led to the Auditor-General’s report and this debate are the result of Government acting outside what should be its proper role. The proper role of government is to provide a limited basket of public goods and a regulatory environment in which real business people can get on with building their businesses, not politicians attempting to be business people with taxpayers’ money.

If you begin at the beginning of this saga, it commenced with poor regulatory practice and confusion over whether or not New Zealanders are supposed to be able to export live sheep and under what circumstances. Had that simple question been answered in a clear and principled way, we would not be here. But, of course, the Opposition, when in Government, banned live sheep exports. The Government promised some people that they would reverse the ban and then did not, and throughout this there was no principled approach to how a Government should regulate. But then it got worse. Then we got an activist Government that attempts to wheel and deal and make commercial deals and pick winners and try to be an activist Government in business with taxpayers’ money. You can hear the Opposition members thinking “That’s right. That’s what this Government does all the time. That’s what they did with Skycity, trading regulatory favours to have a convention centre. That’s what they do regularly with the Major Events Development Fund.”, but I have got news for the Opposition members. They have absolutely no right to criticise any of those practices, because they themselves are guilty of exactly the same principles and exactly the same philosophy.

Let us just ask the Green Party how their so-called Green Investment Bank would pick winners. If you have a Green Investment Bank, you are picking technologies that will not attract capital in an open market. You are picking them precisely because they fit your particular political preferences. A Green Investment Bank would be just as open to the kind of corruption the Opposition has been accusing the Government of today. But what about the Labour Party? Is anybody aware of anybody who has proposed a $2 billion railway straight down the Dominion Road with no business case? Is anyone aware of anybody who has recently done that? The fact of the matter is that the two marital partners of Labour and the Greens are just as guilty of activist government as any Government on this side of the House has ever been—wheeling and dealing, picking winners, and trying to get into business with other people’s money—which inevitably leads to precisely the issues we are debating. But what about the very vocal New Zealand First members? They have got a lot to say for themselves, or at least many words very loudly, but very little thought. Who in New Zealand First does not want to give more money to their own particular preferred hobby horse—or should that be trains? Actually, “horse” was not a bad metaphor.

💬 Denis O’Rourke: What about charter schools—is that a hobby horse?

How many in New Zealand First know their own history of giving oodles and oodles of cash, taxpayers’ hard-earned money, to the racing industry because it fits their particular preferences? How many of them would love to give hundreds and hundreds of millions of dollars more money to KiwiRail to open non-viable railway lines? I hear members asking: “What about partnership schools, kura hourua?”. If they cannot tell the difference in contracting for a service that it is part of the core role of Government to provide on a contestable basis, getting better results for the students, then I do not know how to help the members from New Zealand First.

The fact of the matter is that the events today are not extraordinary. They are symptomatic of a Government and of Governments from both sides of the House, of both stripes, that think it is the most normal thing in the world for an activist Government to wheel and deal, to pick winners, and to spend other people’s money on its own political prerogatives of the day, and all of the Opposition members who have been crowing about this report have no different principles from that which they are criticising today. Only the ACT Party truly believes in low, flat taxes, a stable regulatory environment, and letting business people get on with building businesses, not politicians pretending to be business people with taxpayers’ money.

That Government is so out of touch. That is what this report shows. It is so out of touch that it thinks it can thumb its nose at transparency, at common ethics, and at public concern. This is not a report that exonerates the Government. This is a report that examines the evidence, provides narrow definitions of “corruption” and “facilitation payment”, and finds that the bar, which is set very high, is not one that can be proven to have been met.

There is so much surrounding evidence that is incredibly damning, and there is a finding that Ministers have severely lacked in their duties. They have not carried out their duties as they should. That is abundantly clear in this report. The definitions used, as I have said, were narrow. The report shows that it cannot be proven beyond doubt that a Minister was involved in corrupt activities, but the central claim of the Government that a cash payment resolved a legal dispute is shown to be absolute hogwash—absolute hogwash. No legal advice was sought by the Minister.

Mr McCully himself wrote the Cabinet paper. Mr McCully wrote the Cabinet paper. The Auditor-General lays that bare. Mr McCully claimed there was a legal dispute that was being resolved by this cash payment, yet he sought no legal advice whatsoever. There is no evidence that a legal dispute was in train or ever would be in train. These are the findings in the Auditor-General’s inquiry into the Saudi sheep scandal. The Auditor-General openly says that she shares the concerns of many New Zealanders about this arrangement.

I quote from the report: “I found significant shortcomings in the paper put to Cabinet in support of the decision to enter into the Saudi Arabia Food Security Partnership. The contract’s benefits to New Zealand were unclear in the Cabinet paper, the business case, and its subsequent implementation. It is not clear on what basis the amounts paid to the Saudi Arabian investor’s company under the contract were arrived at. A key objective of the Saudi Arabia Food Security Partnership was to remove a perceived obstacle to a free trade agreement with the Gulf Cooperation Council. That agreement remains unsigned,”—i.e. if that were the impediment, you would have thought that the agreement would have been signed by now.

The Auditor-General goes on to raise further concerns about transparency, about the effectiveness of the arrangement, and about shoddy practices. I would encourage members in the House and outside the House to read this report in full, as Mr McCully did. Mr McCully did it under the guise that it gets him off the hook. I am doing it because it shows a shoddy Government with weak practices that is not observing the rules of common decency and is failing to be transparent in its dealings with the public. It is out of touch. It is arrogant to think that a proper process should not be followed with the spending of Government money. In so far I agree with the previous speaker, David Seymour.

The Auditor-General also says in this report that there is a range of questions that remain unanswered. She has an expectation that the Ministry of Foreign Affairs and Trade and New Zealand Trade and Enterprise will assess and report on the value of the whole spend once the partnership money has been spent. That is something she is yet anticipating. She says she is unsure about the value of this spend. There is nothing in here that convinces her that this was money well spent, and, indeed, right up front she says that the parameters of her investigation were very narrow. I think there will be more questions to come on this. This does not put an end to the discussion. It is a report that does not exonerate the Government. In fact, it opens more questions about the Government’s failed and shoddy deal, the Saudi sheep scandal.

It also says in here that the Auditor-General found mixed messages and a general lack of transparency, and this is a pattern. It has to be said that this is a pattern that is growing, and the Auditor-General refers to a growing number of accusations of corruption over her time in the office. “Accusations of corruption and bribery should be of concern to us all.”, she says. That is her final conclusion in the overview at the start of the report.

She concentrates, too, on the mixed messages that have been sent, and that is Ministers not being straight. That is Ministers not being principled. They are saying one thing to one party, another to the next, and a third thing to the media, and they are not releasing the documents in a timely fashion, to cover up a scandal. We have seen it with child poverty. Ministers do not admit that happens. We have seen that they do not think there is a housing crisis, when people are sleeping in cars, and we have seen it in Skycity, which the Auditor-General said was a deal that was neither transparent nor even-handed. We have got another one here. There are plenty more questions to come on the Saudi sheep scandal.

I was just wondering whether I might share my own context around how this whole situation has arisen.

💬 Carmel Sepuloni: Only if it’s relevant.

Well, I think it is relevant. If I go back to April 2010, at that time I had been living in the Middle East with my family for a fairly long time. I was still very involved in trying to grow my own business up there, and I was lucky enough to be asked to assist with a trade delegation that was coming up to the Middle East. It was led by our Prime Minister and also had our Minister of Trade, Tim Groser, on it. Of course, everyone will remember that shortly after arriving in the Middle East we had a tragedy back home. On Anzac Day one of our Iroquois went down and we lost three of our servicemen. The Prime Minister, of course, did absolutely the right thing: he decided to come home to do what he could to support the families and be here with the nation over what was a very difficult time.

Our trade Minister stayed out there and carried on with the delegation. I was lucky enough to get some time with him, along with some other business people—Kiwis who had been up in the Middle East for a long time—and we raised with him and talked with him about the issue around the free-trade agreement. He was very open with us about the fact that there was a real challenge to face, and that was around this issue with live sheep shipments and the perception that an agreement had been broken, and that that lay with Saudi Arabia—which, of course, is extremely influential and has a leadership role within the Gulf Cooperation Council (GCC).

I just want to address, at this point, the point that Mr Shearer made around the fact that the Government is trying to blame the Labour Party, which was in Government at the time that the agreement was made. I do not know the context and I do not know the details around why that agreement was made. I am certainly not pointing the finger at you. I do not want to see five or six thousand of our Kiwi sheep lost while being moved in an ocean shipment. If that was the right decision to make, I fully support it. I think that was the right thing to do. However, the perception that created for the other partner—the Saudi partner—was that we broke the deal. In my world, when I was in business, the minute that you broke a deal, for whatever reason—even if it was the right thing to do—you immediately took on legal risk. I think the point around whether there was genuine legal risk in relation to this deal gone wrong—absolutely, there was. Whether a party was going to trigger that and take it into court, we do not know—that is crystal ball stuff. The Minister was very right when he had a look at the situation and clearly identified that, as a country, we were carrying legal risk. That cannot be debated.

In terms of economic opportunity, I can tell you now, as someone who was lucky enough to spend a fair bit of my adult life in the Middle East building a business, that the GCC is very good to do business with. We have lots of services and products we can offer up there. We have a large Kiwi community living throughout the GCC, and there will continue to be real opportunities for us, especially around this agri-hub and agribusiness. Is there economic opportunity up there, and was it at risk? Without a doubt. In terms of diplomatic risk, of course there was diplomatic risk. I remember when New Zealand was blocked in getting apples into Australia. The Government got alongside our apple producers—it was the right thing to do. We needed to try to open that market up, and that is exactly what we did as a Government. Make no mistake, the Saudi Government would have taken exactly the same position with one of its own citizens, if it felt that a deal had been broken. We were carrying significant diplomatic risk.

When I spoke to Tim Groser in April of 2010, he was quite right in saying that this was complicated but that they were going to be throwing themselves and their resources—we have got very good trade negotiators and we have got a very strong Ministry of Foreign Affairs and Trade, and they had been working to try to find a solution—to allow us to unlock the negotiations around a free-trade agreement. And that is exactly what they did.

I would just like to highlight and support the Minister’s comments around reading the report. It is important, now that the report is out, that people get it and read it. They can come to their own conclusions on it, but there are a couple of points that I do want to make that I think come to the heart of it. On page 48—bearing in mind that we have not had a lot of time to read the report—“Was there corruption or bribery?”. There are four points that the report goes through here—it is very detailed. It is a very good report, and I support the Minister’s comments around it. I am not challenging anything in here; he is not going to challenge anything in here. The whole purpose of the report is—they have spent a lot of time, they have gone into a lot of detail, and I think they have done a very, very good job of it. But, basically, the report says: “Therefore, we do not consider that an offence of bribery could be established. We found no evidence or reason to refer the matter on to an appropriate agency to carry out a criminal investigation into corruption and bribery.” They could not be more clear about what they are trying to say in the report.

“Was there a facilitation payment?” This is another accusation that has been levelled at the Minister for months and months. “Was there a facilitation payment? We were also asked whether there were any facilitation payments. The Ministry of Justice has explained a ‘facilitation’ or ‘grease’ payment as a small payment made to a foreign or public official to speed up a service to which the payer is already entitled.” They found that there were no facilitation payments. They are very clear about that. There were no facilitation payments. I do not know how much clearer they could be.

If I move forward: “How was the money spent?”. Of course, this is truncated, but—“How was the money spent? The Ministry made a $4 million payment to HAATT Est on 21 February 2013. The rest of this Part covers the spending of the remaining $7.5 million allocated to the Partnership. We have reviewed NZTE’s spending from the time the funds were transferred from the Ministry and found that the spending was made with appropriate financial authorities in place.” The report is very clear that, actually, the right financial authorities and the right financial processes were in place. There were no facilitation payments.

If I move on, I actually come to the point that the Minister opened with. This comes to the heart of the report: “We found no evidence of corruption, bribery, or a facilitation payment. The arrangements entered into were a lawful use of public resources, and public money was spent with appropriate financial authorities in place.” You cannot be any clearer in the report. The Minister has stated clearly that some things could have been done better, right? I guess that just about all of us claim at some point in our lives that we could have done something a bit better, but, actually, there is a big gap between doing something better and actually doing something illegally. I am very happy to stand up in the House today and support the Minister of Foreign Affairs and say that he, the Speaker of the House, the Rt Hon David Carter, and the Hon Tim Groser, along with their officials, have actually done a very good job at finding a way to be able to unlock the ability for us to enter into strong negotiations around a free-trade agreement. The Hon Todd McClay is progressing that very well up here. I can tell you now, from my own context up there and from my own networks up there—I have invested heavily not only financially but also in friendships and networks—that they feel this thing is moving very, very positively in the right direction.

If I can just finish up by saying that there are real opportunities that exist up in the GCC. Someone mentioned food security. Food security is very important and is something that we take for granted down here. I would be the first one to say that when those sheep arrived and threw their lambing up in the Middle East, for whatever reason, something went wrong. I did not like it either. I did not like the losses that were faced. There are all sorts of reasons behind that. Climate is the obvious one, and that there was no ability to transition the sheep properly. I do not know—I am not in on the details—I am just guessing. But I would say that the GCC countries are making big investments into being able to provide protein for their growing populations, and, actually, New Zealand has got a huge opportunity there to be at the forefront of technology and innovation and to be able to assist them with the issues that they face with food security. Thank you very much.

The debate having concluded, the motion lapsed.