5 Aug 2015

Saudi farm a 'sweetheart deal' - Labour

7:12 pm on 5 August 2015

The Prime Minister remains adamant the Government's multi-million-dollar deal with a Saudi businessman was forced upon it because of the previous Labour-led Government.

But Labour said the latest release of official documents proved it was a sweetheart deal to shut down a single opponent to a trade deal in the gulf states.

John Key.

Prime Minister John Key Photo: RNZ / Alexander Robertson

After months of controversy over its decision to spend $11 million setting up a farm in the Saudi Arabian desert, the Government yesterday released hundreds of pages of official documents dating back to 2007.

The Government has said the former Labour Government misled Saudi businessman Hamood Al-Ali Al-Khalaf over live sheep exports resuming, and it faced possible legal action.

John Key today continued to lay the blame for the deal at Labour's feet, saying the papers did not show it was National's fault.

"The documentation shows that this issue has been going on for a very long period of time, but the initial ban was started by Labour and Labour continued very shortly after that to talk to the Saudis about how they were going to resume live exports," he said.

It was always going to be a "he said, she said" type of argument, he said.

The documents confirm that Labour looked at lifting the ban on live sheep exports for slaughter, but also that National repeatedly looked at doing the same.

Ministers David Carter, Murray McCully and Tim Groser even planned a shipment of 25,000 live sheep for 2012 and acknowledged the Saudis did not believe New Zealand had been acting in good faith during discussions to resume the trade.

The papers also show the Saudis raised this with Mr Key directly.

But a significant portion of the information released has been redacted.

Mr Key told reporters he had no control over what was released.

"You've got to understand that we don't make the call on what's released and what's not. That's the responsibility of the departments," he said.

"Look, in the end, the officials advised Cabinet that the deal was both lawful and able to proceed."

Caucus run 21/07/15

Labour leader Andrew Little Photo: RNZ / Alexander Robertson

But Labour leader Andrew Little said the documents clearly showed that National made a sweetheart deal.

"I don't know how paying $4 million to shut up a businessman in Saudi Arabia is in the best interests of New Zealand... I think they're being cute about the significance of the information and the significance of what's happened."

There was nothing in the documents to suggest that Labour's ban on live sheep exports would pose a legal risk, he said.

Green Party co-leader James Shaw said the Government had gone out of its way to muddy the truth and provide select details designed to confuse the public about why it made the deal with the Saudi businessman.

"All we can see is that he's making hollow claims. One of the documents actually says that the Auditor-General thought that the deal was of dubious legality.

"The fact that so much of the documentation was heavily redacted basically shows that the Government is trying to cover its backside."

The Greens have written another letter to the Auditor-General asking her to formally investigate the deal.

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