Sheepgate the final chapter

Written By: - Date published: 7:38 am, February 12th, 2019 - 44 comments
Categories: david parker, national, same old national, the praiseworthy and the pitiful, trade, you couldn't make this shit up - Tags: , ,

One of the weirdest episodes in New Zealand politics is now at an end.  The Government has pulled the plug on the Saudi Sheepgate deal.

I have followed the story for a while.  A more potentially corrupt use of state resources I cannot imagine.  When you boil it down it sounds totally insane.  And it was. Here is my earlier description:

When the history of this National Government is reviewed by academics and scholars the tale of Sheepgate will stand out.  In future years people will wonder if it was even true or the insane invention of someone high on drugs.  Because if ever a series of posts deserved the “you can’t make this shit up” it is these.

Lets recap the history:

… a rich Saudi businessman became upset when New Zealand stopped live sheep exports following a particularly disastrous ship trip during which four thousand sheep died.  National made noises as if the ban would be reversed but then resiled from this.  To assuage the rich Saudi businessman’s feelings a total of $11.5 million of taxpayer’s money has been or is being paid.  The sums include a “compensation but not a compensation” payment which was designed to keep the lawyers away from it and which incorporated a payment to the Saudi businessman for intellectual property for hosting New Zealand sheep on a New Zealand designed farm.  The rest included the construction of a model farm in the middle of the Saudi desert and plane tickets for 900 sheep, most of which died after landing.

It seems clear the payment was essentially a facilitation payment to get the Saudi’s to sign a free trade agreement.  Not only is this on the face of it corrupt, but it has so far failed so it is also clear evidence of incompetence.

Initially McCully tried to sneak the issue through Cabinet and then hide the mess.  And when it was reported on National used that good old technique of blaming Labour for the situation.

The Auditor General became involved.  National celebrated a finding that McCully had not acted corruptly.  How low National’s standards are.

And now, years later, we still have no trade deal with Saudi Arabia.  Not only was the deal an example of a potentially corrupt payment to an individual in hope that there would be a free trade agreement signed by a foreign state but it was something worse.  It was a failed attempt to get a free trade agreement signed.

 And won’t someone think of the sheep?

I said this earlier:

To make matters even worse it has been reported that three quarters of the lambs born to the ewes who were transported to the farm have died from causes such as starvation, scours and issues around animal husbandry.  Who would have thought that placing New Zealand sheep on a farm in the middle of a desert would be so disastrous?

Well it is finally at an end.  David Parker has pulled the pin on the last part of the deal and saved us a million dollars.  From the Herald:

The controversial Saudi sheep deal been shut down, which the Government says will save about $1 million.

The deal was made to set up an agribusiness hub in the Saudi desert for Saudi businessman Hmood Al Ali Al Khalaf, which would be used to showcase innovative New Zealand farming operations.

Taxpayer spending on the agrihub was approved by the previous National Government in February 2013, and the following year 900 sheep were flown over on Singapore Airlines.

But Trade Minister David Parker said the deal has now been axed.

“We’re not spending any more money on its installation or delivery,” Parker told 1 NEWS.

“We have managed to bring it to an end, saving the last million dollars or so. But I’m afraid the other $10 million that has already been spent has been flushed down the drain by the prior Government.”

It means that a $2.5m kitset abattoir, which is in the Hawke’s Bay and was intended for the hub, will no longer be sent overseas.

About $1.17m had been identified for abattoir delivery and installation.

Matthew Hooton has been a trenchant critic of the deal and has not held back in his summary of what happened.

The major players have of course gone.  McCully has retired and Key has his knighthood and is doing various corporate gigs.

But the next time someone tells you that National are better managers tell them about the time they built a sheep station in a Saudi desert and how almost all the sheep died and how they paid an individual $4 million to settle a legal claim that did not actually exist, forgot to get him to agree that the dispute that did not exist had been settled, and failed in the whole reason for the exercise, and that was to get a free trade deal with Saudi Arabia.

44 comments on “Sheepgate the final chapter”

  1. Incognito 1

    A few million sheeple where led astray by fake economic shepherds.

  2. patricia bremner 2

    The report that an” Abattoir was ready packed waiting to go.. What the???”

  3. tc 3

    At least the govt can stop this one. It’s the long term economic and social losses from the power generation asset stripping and the wilful hollowing out of education, health, housing, environment etc that is shonky blinglishes true legacy.

    Oh and that convention center thats giving Fletcher’s indigestion as they’re eyes are too big for their stomachs. Some dead rats don’t go down that well.

  4. It has been a debaacle.

  5. Robert Guyton 5

    National knew that they could pull the wool over the eyes of the New Zealand public long enough to get away with anything at all. They know how to do it and have shown that they will do it to suit their own ends. I hope Wayne Mapp appears here to comment on this issue.

  6. ianmac 6

    I wonder if McCully could spend $11 million without blinking, what else might have happened out of sight?

  7. Cinny 7

    Excellent work from Mr Parker, he continuously asked question while in opposition and has walked the talk re the saudi sheep saga since coming into government.

  8. alwyn 8

    This simply illustrates why we need to change the Government regularly.
    No Government will ever abandon something they started. They simply refuse to admit that a policy was mistaken and dump it. You need a new Government who will dump the white elephants.
    That is, of course, the reason why Governments should never get involved in running businesses. No matter how badly things are going they will never admit they got it wrong.
    At least in this case it has only cost us about $10 million.

    Now let us see whether the current mob will dump a ridiculous scheme that has even less chance of being a success. It is also one where it will, if not scrapped now, cost us something more like $10 billion rather the $10 million.

    Dump Kiwibuild. Better still dump the idiot responsible and kick Twyford out of Cabinet.
    Will they do it? Of course not. They don’t have the sense to do something so sensible.

    While they are about it will they also scrap the foolishness that is the tram to the airport in Auckland. I think I saw something recently that said the price is now up to an estimated $6 billion.
    Ah, here is the source of the figure. Surprise, surprise The Cabinet Minister responsible here is also the Village Idiot of New Zealand politics. Phil, take another bow.
    https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12057244

    ps. While they are about it can they please scrap the fiasco that is the America’s cup? I see that a further $37 million from the Government and the Auckland Council is going into that black hole.
    https://www.stuff.co.nz/auckland/110522994/auckland-council-plans-220m-tax-dodge

    • Formerly Ross 8.1

      I did enjoy your rant, especially that government should not get involved with business. Yes that’s why we have full employment, high wages and no homeless people. The private sector is so efficient!! Remind me again how many men died at Pike River?

      Here’s a couple of recent example where the private sector failed dismally and acted shamefully. You’ll no doubt find an excuse for such behaviour.

      https://i.stuff.co.nz/business/110463611/stung-with-9000-compensation-cafe-owner-turns-to-givealittle

        • alwyn 8.1.1.1

          I see no reason at all to approve of this. On the other hand I am not the one who is forced to pay for it. When a Government organisation screws up, and some Cabinet Minister’s ego is involved I am,
          This case is really not what I was talking about though is it? My complaint is the people who, because they are completely incapable of admitting they are wrong insist on propping up things that should be closed down. Phil Twyford is the perfect example.

      • alwyn 8.1.2

        My “rant” as you call it makes no claim at all that the private sector always gets things right. Of course they don’t.

        What does happen though is that the person who screws up doesn’t have an unlimited line of uninvolved people who are forced to keep throwing money into the hole. If a business starts spending money on rubbishy projects there is a much better chance that the person responsible will get sacked. If that doesn’t happen the only people who will be burnt are the willing investors. If an investor isn’t happy with the way a company is being run they can sell their ownership share and get out.

        Taxpayers don’t have that option.
        So no. I don’t think that the private sector is always right and I certainly see no need to justify everything they do. I don’t have to be personally involved either.
        If you want to waste your money on trashy schemes go right ahead. Just don’t force me to share the cost.

        • Kevin 8.1.2.1

          I must have imagined that the Government bailed out SCF then.

          • alwyn 8.1.2.1.1

            No you don’t need to imagine that at all.
            I suggest you address the following question to Michael Cullen though.
            “Why did you include SCF, which was certainly not a critical part of the New Zealand banking system, in the Guarantee scheme?”
            I’ll bet you don’t get an answer out of him though.

            • blacksand 8.1.2.1.1.1

              Are you quite sure of your facts there? It still looks very much like SCF was admitted into the scheme on 19th Nove, 2008.

              Funnily enough on the first day in office of John Key’s govt, someone who supposedly knew a thing or two about banking.

              • veutoviper

                Correct.

                The election was held on 8 November 2008, and the minority National Government led by John Key sworn in on 19 November 2008, – the same day as the Secretary to The Treasury approved SCF admission to the guarantee scheme.

                • alwyn

                  Yes, you are quite right.
                  The scheme itself, and the firms covered had however been arranged by the outgoing, caretaker, Government. It was in fact implemented on 12 October 2008.

                  The firms accepted into the scheme, although selected by the outgoing Government couldn’t have their admission to the scheme approved for Constitutional reasons reasons. They were only a caretaker Government and couldn’t commit the Crown to these obligations by that time. You were, I believe a Public Servant VV. I am sure you are aware of the conventions. Thus the admission of the firms to the scheme couldn’t be done until we actually had a new Government, with a mandate, in place.

                  I am sure that National were accepting of the scheme. There was no real choice after the actions of the Australian Government. Cullen shouldn’t, at least in my view have accepted all the firms that applied however.

                  If you really think that it was the Key Government who arranged it in the first half hour of their term I hope you won’t try and blame National for things that are happening after about 16 months of the current lot of twits?

            • Tuppence Shrewsbury 8.1.2.1.1.2

              but $1 million in corrupt spending is still way worse than $2 billion in wasted in spending because the intentions for the $2 billion are right. figures don’t matter, only virtue

              • alwyn

                $2 billion in wasted spending?
                You are dreaming. We already have that in the Kiwibuild. Then there is the $3 billion in the Jones slush fund. The budget for the tram to the airport is up to the grand sum of $6 billion. A couple of billion for cycleways for a few cyclists. $250 million on the America’s cup.
                Then their is the money Winston is going to provide to his racehorse owning mates for their pretty horses and all weather tracks.

    • joe90 8.2

      This simply illustrates why we need to change the Government regularly.

      McCully’s willingness to pay baksheesh and his party’s attempt at justifying bribery simply illustrates just how fucking corrupt National is and why we need our own Foreign Corrupt Practices Act.

      /

      • alwyn 8.2.1

        I shall leave you to your delusions. I suppose you think that the coalition party that is in the Government’s dealings with fishing companies are all completely innocent and high minded? No doubt everything is done with only the interests of thee New Zealand public at their heart.

        And don’t say that doesn’t involve the Labour Party. They went into coalition with them and are just as guilty for any dodgy deals.

        And isn’t it amazing that the partner of one of the current Ministers is suddenly the recipient, through the firm he is involved with, of lots and lots of contracts that were issued without going out to tender? Far more than were issued by the previous Government.
        Nothing wrong with that of course. The Government Departments have suddenly become enlightened by the amazing skills that are on offer.

    • Gabby 8.3

      What’s Munter McMutton up to these days wally? Gettin any Sowdy connected ‘consultancy work’?

      • veutoviper 8.3.1

        I was wondering that myself,

        So, first, his own consultancy firm established in 2017:

        Murray McCully, Chairman, McCully Consulting Group
        Strategic Counsel, Public and Private Diplomacy,
        Barrister of the High Court of New Zealand

        https://www.murraymccully.com/

        “… Following his retirement from Parliament, Murray McCully is available to discuss assignments that draw on his knowledge of national and global affairs, which includes:
        Good understanding of major issues across key trading partners.
        Excellent network of relationships including China, South East Asia, Europe, the Middle East and Africa.
        Strong exposure to international law and the operation of international institutions.
        Close familiarity with the Pacific region and good personal relationships with key decision makers.
        Good understanding of international development issues and processes.
        Long experience of New Zealand Government decision making processes.
        Strong background in political risk/crisis management.”

        Second, from July 2018 , chair of the Papua New Guinea New Zealand Business Council:

        https://www.radionz.co.nz/international/programmes/datelinepacific/audio/2018655635/murray-mccully-heads-nz-png-business-council

        ” The new chair of the Papua New Guinea New Zealand Business Council, Murray McCully, says PNG wants to engage more with New Zealand’s agriculture sector.

        But the previous chair, Tamati Norman, who was asked to step aside for the former New Zealand Foreign Minister, says the council is failing its purpose. …

        To make way for Mr McCully, businessman Tamati Norman was asked by the council to step aside and work with him as the new chair. Instead, Mr Norman decided to leave entirely.

        He was asked if Mr McCully is the right man for the job.

        “A better question is did he have any engagement with us in the six years that I was in the executive, and the answer is no.”

        Mr Norman says the council focuses too much on the oil, gas and mining industries in PNG and needs to do a better job of engaging with other sectors.

        So Mr McCully’s promise of agricultural engagement may be a welcome sign of change within the council, but Mr Norman says there are other issues too.

        “We had our 25 year celebration and that 25 year anniversary was held at the Northern Club. Tell me how that is representative of a Pacific business.”

        The Northern Club, an exclusive club in Auckland’s CBD, once had a reputation for excluding women and Māori.

        The business council has held at least 3 events there this year.”

        Also a little snippet re McCully in article last week re the potential Blue-Green party and Vernon Tava – supposedly the new Sustainable New Zealand Party announced a few days ago

        https://www.radionz.co.nz/national/programmes/mediawatch/audio/2018680526/a-potential-political-party-hooks-the-media

        ” … ZB’s Heather Du Plessis-Allan said a new party was “definitely happening”.

        She said she had told her editors about a source who had been approached by Michelle Boag and National Party strategist Murray McCully about the idea “weeks ago”.

        Heather Du Plessis-Allan told listeners Vernon Tava did not want to speak to her about that at the time….

    • AB 8.4

      “Governments should never get involved in running businesses”
      Yeah – these guys sound pretty useless and these guys too.

      • alwyn 8.4.1

        Equinor is of course a publicly listed company, in which the Government owns a majority of the shares.
        Just like Meridian, Mercury and so on. As such it has to follow all the rules for Public Companies and Ministers can’t make them carry out any stupid ideas they might have. In other words it is not a Government run business.

        Did you read the recent history of the TVA? Say the last 30 years. Not very pretty is it? In fact its successful days were pretty well over by about 1950.

        • AB 8.4.1.1

          Bollocks. What these and countless other examples show is that hard and fast rules (like your initial sweeping statement) are the provenance of ideological idiots.

          • alwyn 8.4.1.1.1

            That’s nice dear.
            Do you think that Kiwibuild is going well and it’s time to double down on the wager?
            Or that we shouldn’t even think of setting any targets for the scheme because if we do people will be able to see whether it is worth it?
            Or do you think that the Saudi scheme shouldn’t be examined because they meant well?
            Or is it just that you are an ideological idiot?

    • patricia bremner 8.5

      Alwyn… Twyford went to Cabinet to Reconfigure as needs changed. He has spoken publicly about Kiwi build. The Saudi Deal was a dirty secret, hardly a business!!

      • alwyn 8.5.1

        “Reconfigure”. What a lovely word. What you mean is that there are not going to be any targets set, measures of how well, or badly, it is going because it would allow the public to see that Twyford is a twit.

        It isn’t the official term of course. Twitford and Ardern have decided the correct term is “recalibration”. What they mean of course is that the number of houses we are likely to get has dropped from the promised “huge” number to something so miniscule as to be unobservable.
        Rather like replacing the planned 16 inch main guns on a battleship with 0.177 inch air rifles. The are just choosing a different calibre.

        The Saudi deal never made any sense to me. However to describe it as a “secret” is certainly rather silly. If it was a “secret” how did you find out about it?

    • Tricledrown 8.6

      Americas cup is about the boat building industry and Tourism. The tax dodge headline is just media BS. Reading the story if the council transfers the land before the date of a new tax. Is not a tax dodge. Its following the law.

      • alwyn 8.6.1

        “The Government is committing an extra $22.5 million to the America’s Cup. But it will only be paid if Auckland Council coughs up another $14.5 million to help pay for higher than expected infrastructure costs for the 2021 event.”
        Did you miss that bit at the start of the link?
        That is what I was talking about. The rubbish about the tax arrangements is just trivia.

  9. mac1 9

    And as the gate swings shut, and the truck departs for the works, all that is left is the dust and the dags and the droppings.

    The farmer brushes his hands off and heads to the local. The stock agent departs in his double cab. The dog pants in the kennel. A cheque arrives in the mail.

    Nothing changes.

  10. mosa 10

    I find it repugnant that for a lousy deal with the Saudis we were willing to inflict torture and death on millions of sheep.
    The footage of these ” live ” exports shows we have a long way to go with our animal welfare practices and our cruel mentality.
    This whole deal should serve as a warning of what happens when you don’t follow due process and try to cover up the actions of a sworn minister.
    On this point i agree with Hooten ” its not corrupt when a kiwi does it “

    • The welfare of the sheep was the last thing on their minds. They treat the people like they treat the sheep.

    • patricia bremner 10.2

      Mosa, money is important to the Gnats. Not People Not sheep Not our reputation.

    • bwaghorn 10.3

      Nz stopped live exports a while back accept in this dodgy little saga . The loop hole mccully used was because they weren’t going direct to slaughter . But only fucking morons could see that those sheep would end up at the slaughter house if they lived long enough . There are know retirement homes for sheep .

  11. Sacha 11

    No trade deal after all that! McCully couldn’t even do corruption properly. In a well-governed country he would be in jail (or alternatively a palatial mansion for his services to the powerful).

  12. RRM 12

    $11m is about 3 hours’ worth of trade with China.

    Way to go Labour, you’re really fighting the fights that matter!

    • Robert Guyton 12.1

      Parker ended this prolonged stoush decisively. Now, he can take on the other running battles and win those as well.

  13. NZJester 13

    Perhaps some more money can be salvaged if the equipment can be sold. Unfortunately, I doubt they will be able to sell it for cost as if it put up for tender, the potential buyers knowing the situation will try and lowball their price.

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