The Auditor General's report on Murray McCully's deal to set up a New Zealand agrihub in Saudi Arabia provides valuable lessons for both the Government and Opposition.

Both sides are cherry-picking parts of it for their own purposes.

But essentially McCully has won, and the Opposition is refusing to accept it.

They shouted bribery and corruption from the rooftops and now that the report finds there was none - and no facilitation payment either - Opposition MPs have changed the goalposts and said bribery and corruption should not be the test.


LISTEN: Political commentator Matthew Hooton speaks with Rachel Smalley about the Saudi sheep investigation

In a snap debate in Parliament, Labour's David Shearer went as far as saying he did not care what the Auditor General had said because it appeared that McCully's behaviour met her definition of it in her report.

Labour and the Greens continue to call for the Foreign Minister's resignation by suggesting he acted improperly, immorally, incompetently, dishonestly and in an unprincipled way.

Labour went after McCully with such vigor in part because he blamed Labour for the problem.

The problem was a disaffected Saudi businessman with a commercial grievance against New Zealand which was preventing a free trade deal with Saudi Arabia and other members of the Gulf Co-operation Council from going ahead.

Labour was stung by the accusation that its officials had given some encouragement to the Saudi Sheik to continue to invest in New Zealand in the belief that its suspension of live sheep exports would be resumed.

It denied it had been so.

But the Auditor General's report contradicts the denials.

It says officials suggested that the export of sheep for slaughter would resume and the Sheik Hmood and New Zealand farmers continued to invest.

McCully does not escape criticism - although it could have been more strongly worded.

The Auditor General sets out areas in which he fell short in his plans to resolve an obstacle in diplomatic relations.

His cabinet paper on the agrihub proposal was not nearly detailed enough, it suggests. It does not back up Labour's claims that McCully misled his cabinet colleagues who approved the deal.

But it says his paper should have set out how sums were decided on a contract for services for the agrihub and been clearer that the Saudi business would own the goods and services.

It pointed out that there was no assessment by the Ministry of Foreign Affairs about the risk of a legal claim of $20 million to $30 million against the Government by the aggrieved business.

It did not canvas other options to remove the diplomatic obstacle.

It did not provide analysis as to how a free trade deal would lead to a $3 billion in trade.

It says the cabinet paper does not tell the full story. That cannot be disputed.

It was clear the Government wanted to steer well away from any precedent-setting compensation payment without spelling it out.

The deal was clearly unorthodox. It was clearly unusual to use a contract with a private business to resolve a diplomatic issue between government, as the Auditor General says.

But the Saudi Government made it clear that the Sheik's grievance was Saudi Arabia's grievance too and that unless the grievance was addressed, relations with New Zealand would not be repaired.

The last word goes to the Auditor General herself, which the Opposition has assumed is aimed at the Government.

It should be viewed a lesson for the Government to be more transparent but also for the
Opposition to take some care in its accusations.

"My final thoughts relate to transparency," Lyn Provost writes. "New Zealand has worked hard to have an ethical and transparent public sector.

"Accusations of corruption and bribery should be of concern to us all. During my time as Auditor-General I have seen an increase in these accusations.

"None of my inquiries has upheld those accusations. However complacency is not an option...Transparency is the best foil for corruption."