Fran O'Sullivan: Maori assets need liberation

Maoridom's elite must face up to some major issues when they gather at Te Papa tomorrow to chart their people's economic future.

Top among them is whether Maori should cash in valuable coastal and other land-based assets owned by tribal-based authorities and pour funds into businesses more likely to generate significant income streams.

Maori Affairs Minister Parekura Horomia is against overturning Maori Land Court provisions requiring 75 per cent approval for any proposal to alienate any of the 1.3 million hectares of Maori land.

But Horomia should be dismissed as a past voice. A politician who thinks Maori should hold on to communally owned land for sentimental and cultural reasons. One who subscribes to misplaced chauvinism that says Maori are not up to competing in business and must hold on to land to preserve their asset base.

The Hui Taumata Steering Group, led by former Governor-General Sir Paul Reeves, raised the issue in a series of stimulus papers to get Maoridom thinking ahead of the hui.

Steering group member Shane Jones - former chair of the Waitangi Fisheries Commission (now Te Ohu Kai Moana) and a Labour candidate in this year's election - acknowledges that alienation of land will be "very controversial".

Jones, who also backs the need to get a quick finalisation to the lengthy treaty claims process, says it is one of those issues that Maori must confront if they are to maximise their assets and unshackle themselves from Government dependence.

The disestablishment of the Maori Land Court - a colonial relic - in favour of mechanisms to gear up Maoridom's asset base is long overdue.

But there is also a broader equity issue at stake for the wider economy. Some questions that might be considered:

* Why should Maori trusts continue to pay a 15 per cent tax rate on what are really commercial operations when other businesses not owned communally have to pay the going 33 per cent rate?

* Why should Maori trusts and incorporations sit on appreciating assets and cry poor instead of investing directly in the future of their people, some of whom live off Government benefits ?

Admittedly these are blanket generalisations.

The commercially minded Ngati Porou Inc has been broadly successful. But even Ngati Porou has been attacked by other East Cape Maori as subject to the defects of tribally based organisations in an era of modern capitalism. Among them are claims that the organisation simply reinforces the traditional tribal hierarchy, that major gains are siphoned off at the top and that nepotism ensures that those "in the know" are looked after.

Nepotism is not a new issue. But it is one that the hui must be seen to tackle head-on to have credibility.

Nearly 20 years ago, a senior Maori civil servant was challenged over a housing loan made to his daughter that bypassed the usual conditions.

Last week Te Wananga O Aotearoa faced allegations of cronyism over contracts issued either to, or through, close associates of its chief executive.

Maori Party leader Tariana Turia now asks us to believe that's just the Maori way.

But - again - if Maori are to increase credibility, the hui must insist on transparency and fair dealing over the issuing of Government contracts rather than flagrant nepotism.

The reality is the continued success of the New Zealand economy requires Maori to pick up their participation rate in business.

An NZIER report estimated the asset base of the Maori economy was worth some $9 billion in 2001 figures: $3.28 billion held in commercial assets used for businesses operated by Maori employers; $2.45 billion estimated to be managed by self-employed Maori; $1.52 billion in assets held by the largest 436 Maori trusts and incorporations; $1.35 billion in assets administered by Te Ohu Kai Moana, Crown Forestry Rental Trust, Waikato Raupapa Lands Trust, Te Runanga o Ngai Tahu, Poutama Trust and Te Whanau o Waipareira Trust.

Lesser amounts include: $176.7 million in assets administered by the Maori Trustee, $145 million (Maori Trust Boards) and $86 million in treaty settlement assets not included in other asset categories.

These figures are conservative given the escalation in land and equities prices since 2001.

But the critical point is that 63 per cent of all Maori-owned commercial assets are in businesses owned by self-employed Maori (sole operators and those with staff) - invested in retail trade, property, transport, tourism and social services.

That held collectively - just 36 per cent - is invested largely in agriculture, forestry, fishing and mining.

Maori trusts and incorporations cleared a mere $17 million profits.

What would be the benefit for Maori if they were able to more readily diversify their asset base and invest into faster-growing sectors?

Another issue the hui must confront is substantial educational underachievement. Thirty per cent of Maori leave high school without a single qualification, against 12 per cent for all other leavers.

The upside is that the rate of Maori participation in tertiary education grew to 20 per cent last year - exceeding the rate for all other students at 13.4 per cent. The downside is that much of that education is at diploma or certificate level.

Maori were adversely affected by the 1980s/1990s economic restructuring because they were over-represented in unskilled occupations.

Now Maori unemployment is down to 8. 3 per cent - compared to 3.6 per cent for the wider population.

And as Maori continue to increase their participation in the labour force their share of the national wages bill will move beyond the current $5 billion a year.

Business Roundtable chairman Rob McLeod estimates a wage increase of $2.97 an hour would deliver huge benefits to Maori in excess of any treaty settlement.

McLeod - who will address the hui - points out that increasing productivity and getting into better paid employment is what Maori should tackle instead of focusing on grievances from the past.

One potential issue is a push by Maori to ensure that their gains are not undone by the impact of international trade agreements, as these deals will open the way for the movement of international labour.

Maori say they do not want to be a labouring class in their own country and do not want an immigration response that comes at their expense.

But Maori cannot have their cake and eat it too.

Someone has to do the manual work and as Maori move up the skills hierarchy there will be more vacancies at the lower end.

Maori cannot cry foul if labour from China or the Pacific Islands fills these gaps if they will not move to where the jobs are.

One issue the hui won't tackle is that of the Maori electoral seats, which has no place in 21st century politics.

The Royal Commission on the Electoral System recommended that ethnically based seats should abolished once MMP was introduced.

But subsequent Governments have proved too supine to risk inciting Maoridom by dealing with the issue.

When Maori get down to challenging this ethnic rort we'll really know things have moved on.