4 Jun 2015

Opposition dismisses 'bluff' over sheep

6:58 am on 4 June 2015

The Prime Minister's warning to opposition parties that the Saudi flying sheep debacle is about to blow up in their faces is being dismissed by them as a desperate political bluff.

John Key responds to the Labour Party's Budget reply speech.

Prime Minister John Key (file) Photo: RNZ / Alexander Robertson

The Government has been questioned for weeks by the Opposition about why it gave more than $11 million of taxpayers' money to a wealthy Saudi businessman to kit out his farm, including flying 900 sheep to Saudi Arabia.

John Key said yesterday that in 2007 the former Labour Government was looking to cut a deal of its own with the businessman,who was aggrieved about the banning of live sheep exports.

He told Labour Party leader Andrew Little in Parliament he ought to be careful.

"The person in danger, is the person whose asking the question - when he might just find it's a bit of a boomerang," Mr Key said in Parliament.

Mr Key said Labour was well aware of the problem with the businessman, Hamood Al-Ali Al-Khalaf, and Cabinet papers from the era prove the government was considering a deal with him.

"What I do know, is that we've treated him consistently and actually probably in the way that the Labour Party were looking to treat the guy as well," Mr Key said.

But the foreign affairs minister in the former Labour-led Government, Winston Peters, said Mr Key needs to come up with some evidence.

"What I made of it, is a whole lot of bluff because he was asked by me the other day to show us the legal opinion and he won't.

"So if he's got a legal opinion, which was the excuse they first acted on, then he'd be pleased - if it justifies his actions to show it to the public - he won't. And now he's bluffing on this matter as well."

Former trade minister Phil Goff said in 2007 Cabinet discussed the live sheep export ban and animal welfare concerns about the method of slaughter in Saudi Arabia, where the sheep are not pre-stunned.

But as far as he was aware no deal with the Saudi businessman was on the cards.

Mr Goff said Mr Key should release the Cabinet papers.

"There was nothing as Mr Key has suggested in the Cabinet papers in terms of our decision that in any way indicated that we were looking at a commercial arrangement with Mr Al-Khalaf as a result of that policy," he said.

Asked by a reporter if there was any other arrangement that he could think of, Mr Goff replied, "Not that I can think of. These events happened seven years ago."

Andrew Little said Mr Key was under pressure over his Government's Saudi deal and was trying everything to divert attention.

"[It is] a standard John Key diversion. They are under pressure on this. You've got a very dodgy payment that so far hasn't been properly explained. You've got a Minister of Foreign Affairs whose now gone troppo for three weeks and a Prime Minister who can't fully explain and defend the actions of his Minister of Foreign Affairs."

Foreign Affairs Minister Murray McCully has justified spending $11.5 million on the Saudi businessman's farm saying the Government was exposed to a $30 million legal claim.

But Mr Key said he did not know whether Mr Al-Khalaf ever threatened to take any legal action.

Green Party co-leader James Shaw said Mr McCully could not keep a straight story over the flying sheep scandal and was calling on Mr Key to stand him down.

But Mr Key was standing by his foreign minister, saying he's done nothing wrong.

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