A report by the Auditor-General into the controversial deal that saw $11.5 million of taxpayer money spent on a Saudi farm has been released.
Auditor-General Lyn Provost announced the inquiry into the expenditure of public money on the Saudi Arabia Food Security Partnership in August last year.
She had received several requests, including from members of Parliament and in a petition from over 10,000 New Zealanders, to inquire into aspects of the deal.
About $11.5 million has been spent on sending New Zealand sheep and equipment to businessman Hmood Al Khalaf's farm in Saudi Arabia.
That included $6 million spent on establishing the farm, including equipment and technology, and a $4 million payment to the Al Khalaf Group.
A key motivation for the Government for the deal was to help progress a free trade deal with the Gulf States.
Al Khalaf's unhappiness with New Zealand's ban on live sheep exports for slaughter has been previously cited by Foreign Minister Murray McCully as a reason why Saudi Arabia cooled on a trade agreement.
The 2003 ban, implemented by the Labour Government and extended by National, had cost them hundreds of millions of dollars, including investments in New Zealand based on the assumption the ban would be lifted.
Saudi unhappiness over how the ban had been handled posed "a major threat to New Zealand's trade and economic interests", McCully told Cabinet, and the farm could remove a "source of major aggravation".
The farm - entirely owned by the Al Khalaf Group - would also act as a demonstration base for New Zealand agribusiness, and remove the threat of legal action.
Mr McCully said Al Khalaf could have sued for up to $30 million, and during questioning in Parliament blamed the previous Labour Government for angering him to that extent.
Opposition parties say there was never a realistic threat of legal action and it has been used by the Government as justification for the "corrupt" deal.
They have labelled the deal - particularly the $4 million payment to Al Khalaf - a bribe, with Labour leader Andrew Little calling for Mr McCully to be sacked.
Al Khalaf's business partner has told media that the farm fit-out was done to "compensate" them for the ban on sheep exports.
Mr McCully told Cabinet that the $4 million payment recognised the intellectual property of Al Khalaf, "the services and in-market networks he will contribute, as well as the settlement of the long-running dispute".
The spending was signed-off by Cabinet in February 2013 and 900 pregnant ewes were flown from New Zealand to Saudi Arabia in October 2014.
In September this year, Trade Minister Todd McClay announced that the stalled free trade deal with the Gulf Cooperation Council (GCC) would be completed.
Mr McClay and his Saudi Arabian counterpart agreed to work towards the early completion of the FTA.
The GCC is made up of Saudi Arabia, United Arab Emirates, Qatar, Kuwait, Oman and Bahrain.
A free trade deal between New Zealand and the GCC was concluded in 2009 but has not been signed or ratified largely because of Saudi objections to New Zealand's ban on live sheep exports, which affected Saudi investors including Al Khalaf.
