Shaw JamesJAMES SHAW (Co-Leader—Green): Something maybe legal but that does not mean it is not dodgy and that does not mean it is not unprincipled. In other words being found not guilty is not the same as being innocent. It is a bit like investing in cluster munitions through a distant legal mechanism. That is legal but it does not make it right. I am pleased that the Minister of Foreign Affairs has chosen to front in the House today to this report. It has been a long time coming. David Parker and I wrote to the Auditor-General on 28 May last year so this report has been 18 months in coming. It finds that no laws were broken but it also finds that there is a litany of incompetence of unprincipled and rogue behaviour of a cavalier approach to the use of public funds and a complete lack of transparency. As David Parker said in his opening remarks in this debate surely we have higher standards for our Ministers than merely not being crooks. Surely we hold them to standards of competence that they observe due process and that they are transparent and that they use public funds wisely. It is quite an extraordinary picture that has emerged through this report. I want to pick up on a few specific points within the report. First of all the Auditor-General finds that the contract for services was used to transfer value to the Al-Khalaf Group in order to (a) settle a grievance and a very vague claim for compensation—this is on page 8—and (b) to resolve a diplomatic issue that was perceived to stand in the way of a trade deal as outlined on page 9. There does not seem to have been a clear finding as to why compensation was dressed up as services. The Auditor-General refers to this on page 9 as a convenient mechanism" and that Mr McCully thought that compensation would need to be scrutinised by "a plethora of lawyers and bureaucrats" and so he wanted to avoid it. This is on page 32 of the report. Because of this guise there was no analysis of the risk of a legal claim. There was not a clear explanation to Cabinet of what was going on. The contract does not contain any settlement wording at all. The Auditor-General refers to these as "significant shortcomings". She says that they are surprising and this is a failure to be transparent. It is worse I think that a Minister is using a sham device to avoid proper process and scrutiny. There are some specific quotes that I would like to pull out. The Auditor-General says: "I was surprised that it was decided to use a contract with a private individual's business interests to resolve a diplomatic issue between governments." I am just going to restate that. It is quite an extraordinary statement: "… it was decided to use a contract with a private individual's business interests to resolve a diplomatic issue between governments." She goes on to say: "It is difficult to reconcile the words of the contract with the unstated objectives which included resolving a complex diplomatic issue and removing a perceived obstacle to the signing of the free trade agreement. The contract for services was a convenient mechanism by which the allocated $10 million later $11.5 million was put towards achieving those unstated objectives. It does not tell the full story." That is an extraordinary statement about the behaviour of any Minister of the Crown operating on behalf of the Government of New Zealand in our relations with private individuals and Governments overseas and it is absolutely intolerable on behalf of the New Zealand Government. An amount of $4 million was paid to a Saudi businessman because he asked for it. The Cabinet paper signalled that the risk of the claim was based only on the $20 million to $30 million that the Cabinet paper said was suggested by the Al-Khalaf Group itself. No one who was qualified to do so appeared to have considered whether the legal risk that Mr Key and Mr McCully used in this House to justify the payment was at all legitimate. Nobody tested that. The payment was based on the unqualified assertions made by Mr McCully. The Auditor-General goes on to say that in the Cabinet paper there is the promised $3 billion worth of trade in 5 years with Saudi Arabia and the Gulf States and that there is no evidence for this claim in the Cabinet paper. There is simply an assertion. The Auditor-General has not been able to find any evidence to back up that claim anywhere else. No one has tested Mr Al Khalaf or the Gulf Cooperation Council's claims that this was the one thing that was standing in the way of the free-trade agreement. That to me is extraordinary; it is utterly extraordinary. This is based on absolute hearsay. The fact that the free-trade agreement is still not signed suggests that it was not the only block. The report also says that Treasury was supposed to have oversight of the project and there does not yet seem to be any evidence that it did. At the very least this is clear incompetence. An amount of $8.7 million of public money has been spent against a budget of $11.5 million. The report says that it is not clear on what basis those amounts paid were arrived at. These numbers just seem to have been plucked out of the air in the Cabinet paper. In terms of competence who thought that shipping South Island ewes to the middle of a Saudi desert was a good idea? Is anybody surprised that 75 percent of the lambs that were born there subsequently died? The report also says that there is a total lack of transparency. The Auditor-General says that the contract does not tell the full story and that to date even at the date of the publication of this report Ministers and officials have not resolved those concerns about the lack of transparency. Although Mr McCully and the Prime Minister and others will stand up and say that this report somehow fully vindicates their behaviour on the basis that no laws were broken the behaviour exhibited led by Mr McCully is clearly incompetent unprincipled rogue behaviour. It is not transparent. I have to say that it is extraordinary to me that he continues on in his role as a Government Minister. I think that is intolerable and he should stand down immediately. The Prime Minister says that this was a creative solution. Well I have to say that I started my career in one of the world's largest accounting firms and we referred to "creative accounting" as things to be avoided at all costs because that is not the basis of a society or a Government on the rule of law and we have higher standards for the behaviour of our Government than that. Mr McCully needs to go. Thank you."