Parker DavidHon DAVID PARKER (Labour): I move That the House take note of a matter of urgent public importance. The only positive for the Hon Murray McCully in this report is that the report finds that he is not guilty of the crime of corruption. No money went into his hands and he has been found not to have bribed anyone else. Beyond that this report is an absolute indictment of the Government its cover-up and its poor standards. Indeed the Auditor-General is very very clear in distancing herself from the immorality—I do not say the morality; I say the immorality—of what has gone down here and she says the use of a contract for services to resolve these matters was a decision made by Cabinet. I comment below on the quality of the Cabinet paper process not on the decision itself. The Government will turn up today as it did with Skycity and say that this report exonerates it. It does not. It lays bare an absolutely disgraceful stain upon the record of New Zealand. The Government has acted immorally improperly wasted millions of dollars covered it up lied to the Parliament and lied to the public. It is only because of the very good services of a couple of journalists in particular that this even came to light. This shabby sheep deal in the desert was exposed only because two journalists chased it down. The first was Matthew Hooton. Matthew Hooton ran a number of articles in the National Business Review saying that this was a shady deal that did not make sense. The only thing he knew about at the time was the then said to be $6 million cost of a farm in the desert which was meant to be some demonstration farm of New Zealand agricultural expertise. He said it never made sense he postulated that it was linked to trying to get a free-trade agreement with Saudi Arabia—an issue that the Government denied—and he kept digging and poking away at it. The National Government pretended there was nothing wrong. Heather du Plessis-Allan then at TV ONE did an absolutely fantastic job of breaking this story. She ran a number of news items on TV ONE she raised the question as to whether this was all as it seemed and she put in a number of Official Information Act requests. She also approached me. I smelled a rat there. I do not normally fish in Parliament; I normally come with things that I can prove. But I came fishing and on the day I came fishing with regards to payments in addition to the $6 million payment McCully stood up on the tiles and told Heather du Plessis-Allan: Oh by the way there's another $4 million cash payment that we haven't told you about." I came to this House and I asked questions about that $4 million cash payment and Minister McCully stood up in this House and pretended that that $4 million payment was necessary (1) to settle a legal risk and (2) to pay for intellectual property. He denied that it was to facilitate a free-trade agreement with Saudi Arabia. He blamed the prior Labour Government. He blamed the prior Labour Government and he said that I should be ashamed of myself for being part of that Government and that Phil Goff should be ashamed of himself for causing that $4 million payment to Mr Al Khalaf. That is what he told this Parliament and that is what he told journalists. The Labour Party sought release of our Cabinet papers from the last Government relating to the extension of the ban on the export of live sheep to Saudi Arabia for slaughter because Mr McCully and the National Government were saying that there was evidence in them to back up his assertion that it was our fault and that he was paying off a legal claim that we had created. The National Government then actively supressed the release of those papers and breached the very Cabinet convention that is meant to act for the preservation of the national interest. After weeks of the Government pretending that we could not see the full amount of those Cabinet papers disclosing to the media redacted copies of them and pretending that in the redacted parts there was evidence of some poor practice by the Labour Government I released them because the Government was in breach of that convention and proved that those allegations that it was us who had somehow created a legal risk were wrong. Of course it was always legitimate for the past Government to ban the export of live sheep for slaughter. We now all know that that was initially because of the death of sheep in transit and that some of those processes have improved substantially but that it was expanded or extended because of the evidence that was on TV about inhumane practices in Saudi Arabia after those sheep landed when they were slaughtered in very inhumane ways that would not be allowed if they were slaughtered in New Zealand before they were shipped as carcasses.Those practices included stuffing them in boots tying them up and cutting the tendons of their legs so that they could not run away. There was great justification for the then Minister of Agriculture under the Labour Government to extend that ban on the export of live sheep for slaughter and the current Government under the then Minister of Agriculture acted entirely appropriately when the National Government itself again extended the ban on the export of live sheep for slaughter not once but twice. Each time it did it it acted legally. Therefore it was always a fiction that there was a legal claim faced by the Government that justified the $4 million cash payment.What has the Auditor-General said? And if I have got time I am also going to take the House through some of the papers. The Auditor-General said "I share many New Zealanders' concerns about the arrangements. I found significant shortcomings in the paper put to Cabinet in support of the decision to enter into the Saudi Arabia Food Security Partnership." on page 5. Again on page 5: "In my view settlement of a grievance was provided under the guise of a contract for services." "Guise"—i.e. a disguised payment which was to facilitate a free-trade agreement and to settle these grievances of Sheikh Al Ali Khalaf which had no basis in law. Then she goes on to say: "Importantly the contract does not specifically reflect the settlement component relating to the grievance."That has been one of our points all along—that these documents misrepresented the true position. The Minister has denied it. He has been found out and if we have now reached the point in New Zealand where the standard of conduct expected of Ministers is so low that they have to be found to be guilty of a crime before they are forced to resign that is a terrible state of affairs in New Zealand—a terrible state for New Zealand—because what is the truth at the heart of this is that the incompetence of the Minister has been shown up. We still do not have the free-trade agreement. The incompetence of the Minister has been shown up. Many millions of dollars have been wasted on a farm in the desert. The lambs died. Rather than showcasing New Zealand's expertise that has sullied our reputation. What else has he done? Well of course he has covered that up as I have already addressed and he has misled Parliament and the public. The contract for services was intended to conceal the nature of the arrangement. That is what we have said and that was what is imprudent. What does the Auditor-General say further? And I am only up to page 5: "This lack of transparency both at the time of the decision and subsequently has led to the concerns from the New Zealand public about the nature of the payments made. To date explanations from Ministers or officials have not resolved those public concerns." That is quite true. In fact until now they have actively tried to cover up the true nature of these transactions.Then as I have already said the Auditor-General says: "The use of a contract for services to resolve these matters was a decision made by Cabinet. I comment … on the quality of the Cabinet paper process but not on the decision itself." She is making no comment on the morality of paying off a disaffected multimillionaire Saudi sheikh—millions of dollars in order to facilitate a free-trade agreement with Saudi Arabia. The Labour Party is willing to make that call. That is unprincipled and wrong. It is not something that the New Zealand Government should do. The Auditor-General then says: "I found some significant shortcomings in the Cabinet paper including that it: did not clearly explain that the Al Khalaf Group would own the goods and services costing the New Zealand Government $6 million;"—it is a bit of a miss is it not Mr McCully? It "did not identify how the $10 million"—Grant Robertson: Making it up.Hon DAVID PARKER: That was the $10 million in addition to the $4 million—sorry the $10 million figure was made up. It was a figure that rose to $11.5 million. We actually know that that $11.5 million included flying sheep on Singapore Airlines to the other side of the world to a farm in the desert where most of the lambs died and it was meant to be a model farm of New Zealand practice. She also says that the Cabinet paper "signalled the risk of a claim against the Government based only on the $20-$30 million figure that the Cabinet paper said was suggested by the Al Khalaf Group (there was no assessment by Ministry officials of the substance of that legal risk);". I and the media have been fighting for a year—a year—to prove that point and the Minister has resisted every attempt. I have got under the Official Information Act notes where the Chief Executive of the Ministry of Foreign Affairs and Trade (MFAT) was schooled on the obfuscatory answers he was to give at the Foreign Affairs Defence and Trade Committee to deny that. The Government dragged the ministry into this cover-up as well. The Auditor-General says further: "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. It is difficult to reconcile the words of the contract with the unstated objectives"—Grant Robertson: That's right. That's the cover-up.Hon DAVID PARKER: It is the cover-up. Then the Auditor-General ends by saying look we are not a corrupt country but transparency must be assured in order to avoid us being a more corrupt country. Two other points. The report does not consider how it was that McCully got his old mate Alex Matheson—who worked for him way back when and was working for the Ministry of Economic Development overseas and somehow came to be working for the Rugby World Cup for McCully then at the end of that road somehow he was appointed by McCully as a sort of roving consular figure in the Middle East—to sew up this deal. He was his inside man who sewed this up. How is it that MFAT allows itself to be so manipulated by its Minister that it allowed that to happen? There was no consideration of how Michelle Boag the former president of the National Party somehow inveigled herself into the deal. This is I think a disgraceful episode. I personally feel misled by Mr McCully. I have never said that he took a cheque or that he had profited financially. I think it is a very very narrow view of what is right and wrong if he is judged by anyone on the basis of whether he breached the Crimes Act in terms of corruption. The truth is that this was a disreputable waste of money which has been covered up for a long long time and it would not have come to the attention of the public had it not been for Matthew Hooton and Heather du Plessis-Allan whom I think we should be celebrating as actually having done very good investigative work on this occasion. Can I also thank the Speaker for enabling the House to actually bring this to a head in a way that caused the Auditor-General's inquiry. If it had not been for the thorough processes that we have around question time again the Government would have avoided responsibility for wasting $11.5 million of taxpayer money including a $4 million cash payment to Mr Al Khalaf. We know it was a compensatory payment because there are other papers which we finally got under the Official Information Act that showed that Mr Khalaf's representative Mr George Assaf said that they needed compensation. Why would a Government ever think that you should buy your way into a free-trade agreement with someone who is connected in Saudi Arabia—with the then Minister of Agriculture getting out of the way—and effectively pay him off because of his grievance which was not substantial in law in order to get a free-trade agreement with the Gulf states?"