12 Aug 2015

PM insists $11m Saudi payout not compo

8:08 pm on 12 August 2015

Prime Minister John Key has faced questioning in Parliament over his insistence a deal his Government made with a Saudi businessman was never about compensation.

John Key at caucas run this morning.

Prime Minister John Key. Photo: RNZ / Alexander Robertson

The Government gave the businessman $11 million in cash, sheep and equipment, saying he had threatened legal action and could have sued for up to $30 million.

The debate this week has been whether the payment was compensation or, as the Government asserts, an investment in a partnership.

However, in government documents released last week, officials talk about finding an appropriate mechanism to meet Hamood Al-Ali Al-Khalaf's demands "for compensation".

Under questioning from Labour in the House today, Mr Key maintained the Government made a cash payment of $4 million to Mr Al-Khalaf for a range of reasons.

"Some of them were the FTA (Free trade Agreement), some of them were our relationship with Saudi Arabia and some of them were to showcase New Zealand products."

Mr Key said the official advice the Government received about the deal was quite clear and quite lawful.