The Maori economy is booming – just not for Ngapuhi

by Tina Morrison / 20 June, 2017
Maori entities have interests in a new hotel at Auckland Airport.

In Tai Tokerau, Ngapuhi is yet to get its share.

Almost three decades have passed since the first settlement under the Waitangi Tribunal process and just three years remain before the 2020 deadline for historic grievances to be settled.

In the time since that settlement – in 1989, in respect of land at Waitomo Caves – Maori businesses have become economic powerhouses with assets worth more than $43 billion and investments in hotels, farms, forests, bus companies and shopping malls.

But leaders of the largest iwi in New Zealand, Ngapuhi, haven’t yet been able to find a common position that would allow the tribe to settle with the Crown. So the impoverished north has so far missed out on the opportunities enjoyed by tribes to the south.

As a result, Ngapuhi are missing out on an opportunity to supercharge their economic fortunes and more than quadruple the iwi’s asset base from $53 million to potentially more than $300 million (the speculation is that the settlement will be $200-300 million). Unemployment in Northland at 8% is the highest in the country, and per capita GDP is the lowest.

“I can only go so far in terms of saying, ‘Here’s a settlement; it’s sitting right in front of you,’” says Te Ururoa Flavell, Minister for Maori Development and Associate Minister for Economic Development. There is “heaps of potential for the tribe to become an economic powerhouse”, and the Crown stands ready to hand over money to settle the claim, but for some of its leaders, “there is a clear problem that must be addressed sooner rather than later”.

Waitomo Caves. Photo/One Shot

Waikato-Tainui, the fourth-largest iwi, reached their historical settlement with the Crown in 1995 and were paid $170 million for past injustices. Two years later, South Island iwi Ngai Tahu, the third-largest, inked their $170 million deal.

Other large settlements were reached with Te Urewera-based Tuhoe for $169 million in 2012 and Ngati Porou on the East Coast for $90 million in 2010.

Maori Fisheries settlements in 1989 and 1992 led to the allocation of $300 million in quota to tribes and a further $300 million of assets allocated to iwi-owned Aotearoa Fisheries, while the 2008 Treelords deal was worth about $420 million for central North Island iwi. To date, 83 iwi have reached agreements with total claims worth $1.19 billion, and relativity clauses have bolstered the initial payouts.

The total assets of the post-settlement entities were valued at about $6 billion in an Iwi Investment Report published by TDB Advisory in December. The report notes that many of the iwi investments are still in land and fisheries, assets from their initial settlements.

“Iwi that received earlier settlements have had a longer period to become experienced investors and develop well-structured organisations and investment policies, potentially leading to better returns today,” according to TDB, which has advised many iwi, including Ngai Tahu, Waikato-Tainui, Tuhoe and Marl­borough iwi Rangitane o Wairau.

A honey maker.

Gathering momentum

Westpac industry economist David Norman estimated in his September 2016 stocktake “Maori in the NZ Economy” that the Maori asset base was worth more than $42.6 billion in 2013, and made up 6.1% of New Zealand’s total asset base. That’s up from an earlier estimate of $36.9 billion in 2010.

Maori entities “have been able to gather some momentum which has been great”, says Flavell, who is Maori Party co-leader. “Of course they hit a few rocks here and there, but generally they are really starting to ramp it up now and I think the country is starting to feel that there is a change in terms of the representation of Maori in the economy.”

The Maori Party has supported the National Government since 2008, and Flavell says that’s given it a seat at the table when economic policy is developed. “Slowly the country is coming to grips with that,” he says, noting that many Maori businesses are now co-investors with the government and the private sector.

“The times are slowly changing and the recognition of Maori business and indeed our contribution into the economy is getting a helluva lot stronger. There is a real desire for Maori to be involved.

“Before, it was Maori over there and everybody else here,” he says. “Now, because Maori have become in certain areas real powerhouses, actually people want to talk to our people.”

Larger iwi who got in early are diversifying investments to spread their risk and have brought in high-profile business leaders to help steer their commercial arms. The board of Auckland-based Ngati Whatua Orakei’s investment arm is led by experienced company director Michael Stiassny, and Waikato-Tainui’s commercial entity is chaired by Sir Henry van der Heyden, who helped create Fonterra Co-operative Group through the merger of the country’s largest dairy companies and later chaired the dairy giant.

Te Ururoa Flavell. Photo/Getty Images

Waikato-Tainui’s investments include shares, direct investment, commercial property and primary industry. A key component is its flagship development of The Base in Te Rapa, the country’s largest shopping centre: it recently sold a half-share to listed company Kiwi Property.

It’s also been involved in casino development with SkyCity, partnered with Hamilton City Council and a hotel operator to build hotels in Hamilton and is planning a second hotel at Auckland Airport. In April, it started earthworks for the $3 billion development of an inland port at Ruakura, Hamilton, which will cover an area larger than downtown Auckland at the end of a 50-year build.

The Waikato iwi also teamed up with South Island powerhouse Ngai Tahu to buy transport company Go Bus, and the two joined with Pioneer Capital to buy dairy technology manufacturer Waikato Milking Systems.

Two decades after settlement, the tribe has built its assets to $1.22 billion and its investment arm, Tainui Group Holdings, has paid out total dividends of $130 million since it was set up in 2002.

Similarly, Ngai Tahu has built up a laundry list of investments, including rural transport firm Hilton Haulage, manuka honey producer Watson & Son and Whale Watch Kaikoura, as well as investments in other private and listed firms including retirement village company Ryman Healthcare. It also has its own farming, property, seafood and tourism businesses.

Ngati Whatua Orakei put up its hand last month as a potential buyer for Ports of Auckland, saying it had long wanted to buy back its former land and the Waitemata seabed and could partner with other iwi and the NZ Super Fund. The port was most recently valued by the council’s investment arm at $1.1 billion.

The proposed land port at Ruakura.

Ngapuhi delays

Although they have yet to reach a Treaty settlement, the Ngapuhi iwi last year increased their annual profit from $1 million to $1.8 million and boosted their net assets by $2 million to $53 million. The settlement would be the last big agreement for the Crown.

It has been delayed by disagreements between the Crown and the Tuhoronuku Independent Mandated Authority (Tima), which has the official mandate to negotiate on the iwi’s behalf. Additionally, because of the objections of some hapu, the Crown had been backing a proposal that a new entity, Te Hononga Iti, replace Tima as the authorised negotiator for the iwi, but that idea has been vigorously rejected, said Ngapuhi chair Sonny Tau in an email. The Crown “needs to accept the fact there is only one body that holds the mandate to negotiate a settlement … and that is Tima. We look forward to when we can sit down together and settle these claims.”

The delays aren’t helping the local people. An economic growth strategy in 2015 noted that Maori made up 30% of the Northland population, but the Tai Tokerau Maori economy contributes only 13% to the Northland economy – and much of that is by way of government expenditure and household consumption.

Achievement by Tai Tokerau Maori at all levels of the education system is 60% lower than the national average, which translates into lower-paid, lower-quality jobs. Its young people look for better prospects in Australia, and those who remain are the most deprived in the country: life expectancy is seven to 10 years less than non-Maori, and Maori rural communities suffer from Third World diseases linked to economic deprivation.

Is there scope for Northland Maori to make economic progress? A Ministry for Primary Industries report from 2013 on Northland’s potential cites the possibilities from better harnessing some 116,000ha of Maori freehold land in the north and upskilling young people in agriculture, forestry, fishing, horticulture and tourism.

In its Northland Regional Investment Prospectus, Northland Inc, the economic development arm of the region’s local authorities, boasts about the subtropical climate, fertile land and beautiful coastline. It namechecks firms that have located business in the north of the country: the American Hancock Timber Resource Group; Japanese timber processor Juken; Spain’s Vicalsa Group, which owns shipbuilding, repair and equipment firm Shipco 360; and global energy companies that own shares in New Zealand’s only oil refinery at Marsden Point, the US’s Exxon Mobil and the UK’s BP. Carter Holt Harvey, owned by billionaire Graeme Hart, has laminates and lumber operations in the region.

“We have to do better for the people of Tai Tokerau,” Flavell says, “because it is morally wrong waiting for settlements to run their course when so many young people and those living in deprivation continue to suffer.”

Update: Prime Minister Bill English said the Crown would step back from Ngapuhi’s Treaty settlement process until Ngapuhi can agree on a group to negotiate for them, after meeting with two groups earlier this month.

This article was first published in the June 10, 2017 issue of the New Zealand Listener.

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