"Tuhoe, I applaud them because they want to improve their bang for their buck ... It will never occur under the current regime but I'm sure Tuhoe can do a better job."
He said Te Arawa was already part of the "mainstream" in Rotorua.
"And the mainstream here is very much being driven by Te Arawa. We are setting the scene with other tribes and the rest of the country is watching us."
Sir Toby said the tribe's development was going so well, Te Arawa would one day have a much greater stake in Rotorua.
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• Tuhoe: Let us run schools, healthcare, welfare, housing
"Te Arawa will own most of the tourist spots in Rotorua, most of the city itself will come under Te Arawa ownership as we buy up the businesses."
But he said non-Maori locals should never be afraid of Te Arawa's ownership.
"Look at the lakes. We have never said people can't swim in the lakes. Non-Maori have a different view of ownership to us ... To us it is something either we enshrine or develop, we do not sell. When I see what is happening in other parts of the country with foreign ownership, it is so wrong because there is no care about what happens in the future."
Rotorua district councillor Merepeka Raukawa-Tait said she wasn't surprised Tuhoe was taking this action.
"Allowing money to be pumped into their tribal area so that people can just survive as beneficiaries has always been a no-brainer."
She said within Te Arawa, progressive movement of iwi taking control had already started.
"Various iwi are using their treaty settlements to set up robust organisations to deliver, often in partnership with government agencies, education, health and housing initiatives."
She said the "stupid notion" that "one size fits all" wherever you might live in this country was long gone.
"Iwi will always be able to deliver better services to their people ... And the long-suffering taxpayer must be praying that welfare dependency will, in the foreseeable future, be a thing of the past."
Tuhoe's plan
* Take over welfare payments, schools, healthcare and housing within its Urewera tribal
area
* Make better use of the $55 million a year taxpayers spend on welfare benefits for 4934 Tuhoe beneficiaries
* Get Tuhoe beneficiaries into jobs to end welfare dependency
* Share control of 15 schools with the Government in Tuhoe are