Little Andrew: Oral Questions — Questions to Ministers Questions to MembersText is incorporated into the Bound VolumeLittle Andrew: Oral Questions — Questions to Ministers Questions to Members[Sitting date: 03 June 2015. Volume:706;Page:4245. Text is incorporated into the Bound Volume.]1.ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: When he said that part of the reason for paying $4 million of taxpayer money to a Saudi business was “wanting to resolve the issues that were holding back the Gulf States free-trade agreement”; what were those issues and why did he think paying Hamood Al Ali Al Khalaf’s company $4 million would help resolve them?Mr SPEAKER: In calling the Prime Minister my office has been advised that the answer will be longer than normal.Rt Hon JOHN KEY (Prime Minister): I stand by my full statement which was that there was a range of different issues including the potential exposure to a legal claim wanting to resolve the issues that were holding back the Gulf States free-trade agreement the fact that we thought we could promote New Zealand in an international environment and that we thought it was the right thing to do. In respect of what the issues were it has been well canvassed in this House that New Zealand’s relationship with Saudi Arabia had been damaged by the events relating to Mr Al Khalaf’s business. Minister McCully took steps to resolve that issue and those steps included a contract for service between the Ministry of Foreign Affairs and Trade and Mr Al Khalaf’s company. The $4 million relate to costs associated with shifting operations that were previously based in New Zealand to a new hub in Saudi Arabia. The Cabinet was satisfied that the full partnership outlined in the Cabinet paper resolved fully the prospect of any litigation.Andrew Little: Given his answer yesterday that part of the $4 million payment was to settle a potential legal claim why did he admit on Breakfast TV today that the threat of legal action was withdrawn a year before the Cabinet paper was ever written? Is it his Cabinet’s normal practice to settle legal claimsthat have already been withdrawn?Rt Hon JOHN KEY: I think the point that I was making this morning—it is not new information—is that people do set aside on the basis of negotiation legal claims that they might want to take. The second point I would make is that these issues are issues that have actually been dealt with by successive Governments. I would take this opportunity to encourage the member to speak to Annette King and Phil Goff about the warnings that they received on these issues when they were in Government and about the actions that they were looking to take. He might be amazingly surprised to hear the answers.Andrew Little: Is he aware that on 14 May Murray McCully stated that he was unaware of any threatened domestic legal action by Mr Al Khalaf?Rt Hon JOHN KEY: I have not seen all of the comments by Mr McCully but if you look at the Cabinet paper it spells it out quite clearly that there was the threat potentially of legal action. As I said just before in my rather fulsome answer it is not just this Government that was aware; actually it was the previous Government. I encourage the member to look to his right and speak with Annette King and with Phil Goff because he will become very aware that he has just been set up by his deputy leader. [Interruption]Mr SPEAKER: Order! [Interruption] Order! This interjection between the two front benches is to cease immediately.Andrew Little: Can he confirm that in 2010 his Government renewed the live sheep export ban that lies at the heart of Mr Al Khalaf’s claims against the Government?Rt Hon JOHN KEY: Actually as paperwork may one day show the heart of the issues was not actually with this Government; it was with the actions taken in 2007. And by the way the previous Government was well and truly aware of that.Grant Robertson: I raise a point of order Mr Speaker. That question by Andrew Little was very direct—Mr SPEAKER: Order! I agree totally with the point that the member is raising. I am going to ask Andrew Little to ask the question again. [Interruption] Order!Andrew Little: Can he confirm that in 2010 his Government renewed the live sheep export ban that lies at the heart of Mr Al Khalaf’s claims?Rt Hon JOHN KEY: What lies at the heart of this problem are the actions taken in 2007. The record will show that the previous Government was well and truly aware of that. Mr Little has just been set up by Phil Goff and Annette King.Grant Robertson: Point of order Mr Speaker. [Interruption]Mr SPEAKER: Order! I can appreciate the point that the member is going to make. The way forward is that I will allow the member two additional supplementary questions.Andrew Little: If he now accepts that the payment was not in settlement of a potential legal claim will he now admit that it was a pay-off to stop Mr Al Khalaf using his influence to hold up the Saudi free-trade agreement?Rt Hon JOHN KEY: No I do not accept that. As I said in my answer to the primary question there were a number of factors: firstly the legal action that could potentially have been taken; secondly the potential for it to be an irritant to the free-trade agreement; thirdly the opportunity to showcase New Zealand; and fourthly as maybe the record will show in 2007 the previous Labour Government was well and truly aware of the situation and was looking to take its own actions. That member has been set up by Annette King and Phil Goff.Mr SPEAKER: Supplementary question—[Interruption] Order!Rt Hon Winston Peters: Prime Minister—Mr SPEAKER: Order! I have not called the member yet. I am just dealing with a little bit of noise down here.Rt Hon Winston Peters: Can the Prime Minister advise why if he has got all this ammunition that implicates the Labour Party in Government and if he has this legal opinion that backs up his actions he is not prepared to show the public rather than seeking to go on covering up a blatant bribe?Rt Hon JOHN KEY: I am surprised the member is asking that question. I thought he would be aware of the Cabinet Manual.Andrew Little: Can he confirm that his Government renewed the live sheep export ban in 2010?Rt Hon JOHN KEY: Yes this Government did renew the ban put in place by Labour and what I can also confirm is: firstly the 2007 Labour Government was aware of the problem; secondly it was looking to take its own actions; and thirdly the Leader of the Opposition has been set up by Annette King and Phil Goff.Hon Annette King: I raise a point of order Mr Speaker. I take exception to the last part of that answer. On three occasions he has claimed that I set somebody up. I object to that. It is a lie.Mr SPEAKER: On the basis that the member has taken offence I am going to ask the Prime Minister to stand and withdraw that part of the answer.Rt Hon JOHN KEY: I withdraw.Andrew Little: Given that he has jetted Murray McCully out of the country for 3 weeks in order to avoid questions has he told him that it might be better not to come back or is he waiting for a “Sepp Blatter road to Damascus” conversion to strike Mr McCully?Rt Hon JOHN KEY: The person in danger is not the person who is not here to answer the questions—Mr McCully. The person in danger is the person who is asking the question as he might just find that it is a bit of a boomerang.Andrew Little: In light of all the irregularities around this payment of taxpayer money to a foreign sheep farmer obstructing a free-trade agreement and given the high trust required in the office of the Minister of Foreign Affairs how can he possibly justify retaining Murray McCully in that role?Rt Hon JOHN KEY: Because the Minister of Foreign Affairs is doing an outstanding job and he has done absolutely nothing wrong. He has looked for a commercial solution—and those might be words that will ring true soon. He has looked for a commercial solution. He has acknowledged that there was a problem—those words might ring true soon. He has done the right thing to remove an irritant to the relationship with Saudi Arabia—those words might ring true soon. He has done a good job of promoting New Zealand on the world stage—those words always ring true with this Government. The Minister of Foreign Affairs has done an outstanding job.