Across The Ditch: NZ Govt Responsible for Bizarre Saudi Sheep Deal + All Blacks V Wallabies Looms

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• published: 05 Aug 2015
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Across The Ditch: NZ Govt Responsible for Bizarre Saudi Sheep Deal + All Blacks V Wallabies Looms - Recorded live on 6/08/15. Peter Godfrey and Selwyn Manning deliver their Across The Ditch bulletin. This week: The National-led Government has been exposed as responsible for one of the most bizarre international deals in decades AND controversy back in NZ over whether the All Blacks are good enough to beat the Wallabies in Sydney on Saturday. ITEM ONE The office of the Minister of Foreign Affairs was forced by the Ombudsman to release secret government documents revealing how the Cabinet approved $11.5 million dollars worth of deposits benefiting a Saudi Arabian businessman, despite the Treasury and the office of the Auditor General advising against the deal. The expose has placed Foreign Minister Murray McCully at the centre of the scandal where the New Zealand tax payer paid for a sheep farm to be set up in Saudi Arabia and placed it into the ownership of the well-connected businessman Hmood Al Khalaf. McCully's position has become vulnerable by degrees as the Government has been forced to release over 900 pages of documents showing how it came to fork out millions for a deal officials warned was not proper. The New Zealand Herald summarised the events well, reporting the timeline as: • In 2003, publicity around the treatment of live-sheep exports led to a voluntary moratorium. • In 2007, the Labour Government banned the export of live animals for slaughter. * in 2008 the National Party won the elections and became Government. • In 2009, Agriculture Minister David Carter (who is now NZ Parliament's speaker) began negotiations with Saudi Arabia for a resumption of live-sheep exports. • In 2010, the National Government extended the ban of live exports. • February 2013, the Cabinet approved Foreign Minister Murray McCully's deal to pay $4 million to Hmood Al Khalaf's business to secure it to run an agri-hub to promote New Zealand agriculture in Saudi Arabia and as a settlement of a long-running dispute over the ban on live-sheep exports. * Also in 2013 Cabinet approved $6 million be paid to NZ businesses to deliver their services and help set-up the Saudi farm. And the Government also paid $1.5 million for 900 pregnant ewes to be flown to the Saudi farm, onboard Singapore Airlines! (end of summary) The Government argues that the whole mess is the fault of the Labour Party. It insists it had to resolve a potentially damaging legal wrangle that began when Labour banned live sheep exports in 2007. The cessation of live sheep exports, the Government says, left the Saudi businessman Hmood Al Khalaf out of pocket. According to the prime Minister John Key, Al Khalaf had considered suing NZ Government $30 million for loss of trade. The opposition insists that is nonsense and that the $11.5 million was a bribe, made to a well-connected businessman, to facilitate bilateral free trade negotiations with the Gulf States Council. But while the National led Government insists McCully and Cabinet acted appropriately, its officials disagreed and objected to the deal. The released documents show the New Zealand Treasury cautioning: "it is unclear what the benefits of this proposal are or what the potential costs are (e.g impact on other trade partners)". Treasury was also excluded from being consulted. And it warned the Cabinet: "Treasury was not consulted on the paper, despite it having financial implications...Treasury does not have sufficient information to assess the value of this new expenditure...on this basis we recommend not supporting this proposal." Likewise the Auditor General examined McCully's business case for the spend up and judged it as "weak". The Auditor General then moved to distance its office from the deal. There are now calls for Murray McCully to be sacked. However, McCully is currently overseas. ITEM TWO The All Blacks play the Wallabies in a pre-Rugby World Cup international in Sydney this Saturday. And while the All Blacks are considered at the top of their game, Rugby pundits in New Zealand are insisting Australia will win this game. Across The Ditch broadcasts live on FiveAA.com.au and webcasts on EveningReport.nz LiveNews.co.nz and ForeignAffairs.co.nz.