Saudi deal a sordid saga

As the Government continues to duck for cover on why it paid more than $10 million to establish a New Zealand demonstration farm in Saudi Arabia, it would be well advised to note the ongoing Fifa bribery scandal.

Foreign Affairs Minister Murray McCully has not been inclined to provide transparent answers as to why he committed more than $10 million to the demonstration farm or why nearly $1.5 million was paid to fly 900 ewes to Saudi Arabia.

Mr McCully's manner during the whole sordid saga gives the impression he never meant the deal to come to light, despite evidence the Cabinet fast-tracked the deal to advance a free-trade agreement with Gulf States.

Paying cash for favours is hogging world attention currently, with Fifa officials having been arrested for allegedly siphoning money into their own pockets from countries desperate to find favour with world football's governing body.

Now, it appears New Zealand taxpayers are gifting a Saudi businessman $10 million for the demonstration farm, as the Al Khalaf Group will retain full management and ownership, including the ewes and their progeny.

The money, according to Prime Minister John Key and Mr McCully, is not to clear the path for a trade agreement.

Rather, it is to provide a sound opportunity for New Zealand companies.

The Government claims the blame for the saga lies with a previous Labour government which instigated a ban on life sheep exports in 2003.

The owner of the Saudi agri-hub, Sheikh Hamood Ali Khalaf, is understood to have grievances over his inability to export his sheep from New Zealand to Saudi Arabia for live slaughter, creating the difficulties between the two countries and stalling the trade agreement.

Contributing to the confusion is the extraordinary claim New Zealand was about to be sued for up to $30 million.

New Zealanders need to know more about that. Until New Zealand wanted a free trade agreement, the Saudis had no leverage against the Government.

The Government should have its own legal advice as to the likelihood of whether such a claim would succeed before deciding any deal. Where is the advice?

There are precedents by the Government in smoothing the way for business deals to be completed.

They include cash on the table when Warner Brothers came to New Zealand demanding tax concessions and changes to labour laws in return for keeping filming The Hobbit in New Zealand.

Finance Minister Bill English also handed over $30 million to the owners of the Tiwai Point aluminium smelter to keep it running until 2017.

The difference this time is Mr McCully keeping the largesse secret. Added to the mix is former National Party president and long-time associate of Mr McCully, Michelle Boag, who turns up as a director of the Middle East Business Council.

Ms Boag delivered an eloquent defence of Mr McCully but the public perception remains: he is a back room fixer of political problems and the more Mr Key can keep him out of the country, and away from prying public eyes, the better it is for the Government.

National, meanwhile, has taunted Labour that it has previous Cabinet papers which would prove to be highly embarrassing for the Opposition.

Labour is perplexed, saying it cannot find anything from its time in government to justify Mr Key's exuberance.

There seems little threat of Mr Key sacking Mr McCully in the same way as another MP with an unassailable election majority - Maurice Williamson - was dumped from Cabinet. But many will feel the presumption Mr McCully misled Cabinet is too big to ignore.

Mr McCully is very much a hands-on minister until he is completely hands-off when there is trouble. And this is trouble.

This saga has turned into a distasteful disgrace and seems another example of how Mr Key is slowly losing control of the agenda of his own ministers.

In this case, the Government spent $11.5 million to sweeten a deal but details emerged only after persistent investigation.

If Messrs Key and McCully believe this deal is money well spent, they need to take more time convincing the rest of us.

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