Photo: Getty Images

The $50 billion Māori economy is nowhere big enough

Size is relative, and a recent report on iwi investment shows that despite growth, the Māori economy has a long way to go.

It often amazes me that when we speak of the Māori economy we do not talk about what comprises the Māori economy, how it is supporting the Māori population, and how to grow the Māori economy. Nor do we talk about its contribution to national GDP, or how fast it is growing. We talk about its size: $50 billion, according to 2018 reports. Occasionally, we break that down into its component parts, but even then we add up all the assets within that class and point out how big it is. That was the outcome of the recently released annual TDB Consultants report on the size and performance of the post-settlement governance entities that are managing settlement assets on behalf of iwi and hapū. According to the February 2019 Report, those Māori organisations control $9 billion worth of wealth. The focus on the headline figure, with a nod to the returns generated by those funds, does not tell the whole story, nor does it tell the right story. We need to put those figures into context – how they compare to the rest of the New Zealand economy and the extent to which we need to continue to develop the Māori economy before we can achieve the bare minimum standard of parity with Pākehā.

First, the context. Graeme Hart, New Zealand’s wealthiest person, has an estimated wealth of $15 billion. That is 50% more than the combined wealth of all iwi and hapū organisations. $9 billion, $50 billion, these are big numbers. $50 billion worth of assets sounds immense, however, this wealth is spread across 745,000 people. That is $67,000 each. Again, let’s put that number in context. The median net worth of a New Zealander, according to the June 2018 household net worth statistics produced by Stats NZ, is $138,000. The same statistics record median net worth of Māori at $29,000 – a full 79% less than that of Pākehā. $50 billion is nowhere near big enough. Not even by half.

How did this happen? We know our history, but it bears repeating. It was through the widespread theft of land, the destruction of Māori societal frameworks and the desecration of our culture and our language. This tripartite attack on Māori by the British colonisers took the thriving and prosperous Māori economy of the early 19th century and turned it into a pre-industrial age feudal society with the aim of providing land and workers to support the insatiable financial appetite of London. It has taken the better part of a century for Māori to reclaim even a fraction of what was stolen from us. Renaissance followed by set back is a common theme over this time. Grand government policies such as the land development schemes of the mid 20th century, the ill-fated closing of the gaps of the late 20th century were punctuated by Native Land Acts that continued to appropriate Māori land from Māori ownership and place it in the hands of Pākehā; the rushed and poorly thought through reforms of the Lange-Douglas Administration in the 1980s which decimated working-class Māori communities; and the continued failures of more recent governments to remedy the massive disparity in social and economic wellbeing between Māori and Pākehā in New Zealand.

There are encouraging signs of growth and improvement in the Māori economy. Māori unemployment is trending down, and continued to fall in 2018 even when Pākehā unemployment rose. Iwi and hapū organisations are, en masse, developing strategies and business plans to shape their next 10, 20, 50, 100 years of growth. Anecdotally, the Māori economy is growing fast. Much faster than the New Zealand economy. The average annual growth rate across the post-settlement governance entities surveyed by TDB between 2013 and 2018 ranged between 4% and 15%. Only a decade ago the Māori economy was worth $30 billion. Should it continue to grow at a similar rate, we will be talking about the $100 billion Māori economy in 2030. That needs to be the minimum goal, because in the 30 years post Rogernomics, the gap between Māori and Pākehā has barely improved. We have lost an entire generation because our policy settings did not do enough to promote Māori development. Development across all four pillars of Māori society – social, cultural, environmental, and economic. Compared to Pākehā New Zealand, Māori are a developing economy living in a developed economy.

Māori trading alongside a vessel in Aotearoa waters. Drawing by Vern King.

We need to recognise this situation and respond accordingly. How do you double an economy in ten years? Is it even possible? Growing the asset base and providing more support for whānau, hapū, and iwi members is an ongoing conversation throughout Māori organisations, including the organisation I work for. We need to grow people, we need to develop capability. We need to move fast. We need to invest in our people, in our land, and in new business ventures. Māori organisations are moving into innovative and potentially lucrative new industries in New Zealand, but the pace of change can be frustratingly slow at times. We are at the forefront of the hemp and medical cannabis industry, and every week I come across a new Māori organisation wanting to break into that space. We have a small but growing Māori tech ecosystem that has the potential to be a game-changer for regional Māori economies such as Te Tairāwhiti, a region which is developing a technology strategy to drive Māori innovation. Across tourism, culture, fashion, and cosmetics, Māori are starting to develop industries beyond the traditional land-based activities.

Yet at the same time, overly conservative tendencies of Māori organisations still result in a lot of capital tied up in under-performing and Papatūānuku-unfriendly beef, sheep and dairy farming. Too often we are landlords and property managers and not business owners and entrepreneurs. But the latter is our history. In the early 19th century, Māori were business owners and entrepreneurs. The first trading ships carrying the New Zealand flag were Māori owned. We farmed, and we fished, and we grew crops; and then we traded them in our own name. Now, too often we sell these to someone else at the farm gate and watch as the profits flow to Pākehā-owned companies trading with branding based on our history and our culture. Māori have the unique opportunity to vertically integrate across the entire supply chain, and in doing so move our economy forward at a rate not previously seen before in New Zealand. We have the land. We have the capital. We have the workforce. And we have the model, look at the success of Miraka in vertically integrating a dairy milk operation, one of several successful vertically integrated, international companies owned by Māori.

We cannot afford to let another generation of Māori start from a position 79% less equitable than their Pākehā peers. Our job is not done until the gap is closed. We stand on the cusp of a period of exponential growth in the Māori economy. But this growth will only be realised if we recognise where we are, and invest in the people and the ideas required to get us there.


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