KEY POINTS:
A little-known church trust is getting legislation ushered through Parliament to ensure it never pays tax on the $212 million empire it grew out of land owned in Auckland's exclusive eastern suburbs.
The Melanesian Mission Trust has owned large parts of Kohimarama and Mission Bay for the past 145 years, using the returns from leasehold land to fund the Anglican Church in the Solomon Islands and southwest Pacific.
For the past decade, the board has been made up of some of Auckland's most influential commercial and legal figures who have more than doubled its asset base through broader investment.
Its annual returns of $7 million account for virtually all the Church of Melanesia's funding.
A recent legal taxation technicality raised fears the returns would be taxable - reducing the funding by $2 million a year and putting the church and its charitable actions in jeopardy.
The board, led by chairman Brian Corban, enlisted senior Labour Party Cabinet minister Phil Goff to sponsor a private bill that will amend the Melanesian Trusts Act 1974 to keep the status quo.
Mr Corban said the trust was not getting "special treatment" over other charitable trusts.
The trust had been recognised by legislation since its formation in 1862, and the proposed amendments would "preserve it as unique".
The alternative would have been to take the trust overseas, severing its historic links with New Zealand.
The trust has previously been described as "intensely private", last making news in 1998 when Mr Corban and the other trustees got High Court approval to end its tradition of unpaid service so they could be paid the market rate for their expertise.
The trust was then getting lacklustre returns and had an eroding capital base.
Mr Corban provided a rare insight into its wealth and workings to the Herald, describing a subsequent turnaround led by the new-look board that has taken its asset base from under $100 million to $212 million and growing.
It has sold off much of its land in the eastern suburbs and now has interests in commercial property across Auckland as well as $30 million in international equities, and $30 million in government bonds in New Zealand and overseas.
Mr Corban, an Anglican, is paid $50,000 a year and the other trustees, who include a Catholic, $25,000.
Mr Corban said the trust deed meant it could provide only the $7 million annual "income" to the Melanesian church and could not dig in to the expanding capital.
He said the Church of Melanesia understood this, as the "trust needed to go on forever" and it guaranteed an income for the future.
"We couldn't condone one generation using all the money and leaving the next generations without any."
Speaking from Honiara, Church of Melanesia general secretary George Kiriau said the trust money was used to employ 700 people, run 13 schools, five training centres two health centres, an HIV/Aids programme and a community printing press.
It also paid for the Southern Cross, a ship that travelled between the islands for mission work and helped to transport up to 200 people a year.
Mr Kiriau, permanent secretary of finance in the Solomons until he was deposed in political upheavals, said a New Zealand dollar currently equalled five Solomon Islands dollars and therefore went a long way.
There were still problems with inflation, living standards and ethnic tensions and the Church of Melanesia was one of the region's few stable organisations.
Mr Kiriau pointed to the church's Melanesian Brotherhood, seven of whom were slaughtered by rebels while acting as peacemakers in 2003, as an indication of the role played by the Melanesian Church.
Mr Kiriau said: "There would be nothing without the Melanesian Mission Trust Board."
* The Melanesian Trusts (Income tax Exemption) Amendment Bill is now at the select committee stage. It has the public support of Mr Goff, New Zealand First leader and Foreign Affairs Minister Winston Peters, National MP Lockwood Smith and Maori Party MP Hone Harawira.
EASTERN SUBURBS FARMLAND GOT TRUST STARTED
* The Melanesian Mission Trust was set up by the first Bishop of New Zealand, George Selwyn, and John Coleridge Patteson, the first Anglican Bishop in Melanesia, in 1862.
* They gave the first trustees 390 acres (156ha) of farmland that became Mission Bay and Kohimarama, with its income to be used to "propagate the gospel in the South Seas".
* The trust's early links with Melanesia included an ill-fated project to train young Pacific Island church leaders at Mission Bay for service in their homelands. The memorial cairn in Patteson Ave records the death of 17 young Melanesians who succumbed to European diseases.
* The trust then used the leasehold income it earned from scores of properties to fund the Church of Melanesia, which mainly covers the Solomon Islands but also Vanuatu and New Caledonia.
* In recent years, a commercially driven board - led by chairman Brian Corban, who also chairs Radio New Zealand and Genesis Energy, and including influential Auckland business figures such as former SkyCity boss Evan Davies - has broadened its investments and doubled the asset base to $212 million.
* It provides virtually all the income for the Church of Melanesia, which serves 134,000 people in the Solomon Islands and 25,000 in Vanuatu and is expanding into New Caledonia. The church's charitable actions are said to be vital in the three subsistence economies.
