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Dr Muriel Newman

Fiscal envelope gets bigger

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Ngai_TahuThe New Zealand Centre for Political Research has long been concerned at the extent to which the ownership and control of communal resources are being transferred to private iwi corporations – without the public really being aware of what is going on. Under the guise of the Treaty of Waitangi settlement process, billions of dollars worth of cash and assets are being transferred from public ownership. From iconic buildings, to mountains, lakes, rivers, coastal areas, forests, national parks, conservation lands, farms, schools, airports, police stations, court houses, even state houses – nothing that is publicly owned is excluded  from tribal demands.

As a result of these concerns, in May 2011, we launched a project to make information about the treaty settlement process more accessible. Thanks to Mike Butler, an experienced researcher and historian, the NZCPR has been able to publish a series of Treaty Transparency Reports that outline the quantum of taxpayer funds and assets that are being used to settle Treaty grievances.

We are pleased to announce that the latest report in the series is now available on our NZCPR.com website HERE. We trust the information presented will not only enable the public and the media to better understand the scale of the settlement process, but will empower them to speak out against settlement excesses. Our over-riding hope is that Members of Parliament and the public will agree that once the present series of claims have been finalised, as a nation it will be time to put the past behind us and move forward together – one people with a shared future and united purpose.

Mike Butler’s Guest Commentary, Never-ending settlement predictions confirmed, outlines the state of the treaty settlement process: “The latest Treaty Transparency report shows that with a total of 60 treaty settlements more or less completed and at least 23 under negotiation, a total of $2.23 billion has been agreed upon and largely transferred. According to the government, the treaty settlement process is probably less than half way through.”

He looks at the results of the settlement process: “Politicians sold treaty settlements as a way of creating ‘an economic base for Maoridom’. Multi-million dollar packages are being given to 80 or so tribal incorporations that could also be regarded as extended-family businesses. Their members claim an ancestral connection to tribes that existed in 1840. Many of these corporations are now doing well, but a large proportion of Maori have gained no benefit at all from the treaty settlement process.”

While it is understandable that Treaty settlements have long been a fixture of Parliamentary business in New Zealand, it is perplexing that over the years politicians have allowed the on-going re-litigation of ‘full and final’ settlements.

A report prepared by the Justice Department’s Richard Hill in 1989 demonstrates how adept iwi have been at calling for compensation for claims for which they had already received full and final settlements.1 In particular he outlined the case of Ngai Tahu.

In 1906, the South Island Landless Natives Act was passed by Parliament to provide a “final” settlement to Ngai Tahu in relation to grievances over lands that were sold in 1848.

Within a decade however, the grievances had resurfaced, resulting in inquiries and Royal Commissions that led to a second “full and final” settlement in December 1944.

By the late 1960s, Ngai Tahu were again agitating for a better settlement and in 1973, the Kirk Labour Government negotiated a third “full and final” settlement.

In 1975, Labour set up the Waitangi Tribunal as a permanent commission of enquiry into contemporary Maori claims, and in 1985, they extended the Tribunal’s jurisdiction to include historic claims back to 1840, enabling claimant groups to re-litigate their multiple full and final settlements yet again!

Ngai Tahu’s fourth “full and final” settlement was finalised in 1998 with the help of Treaty lawyer Chris Finlayson – now Minister of Treaty Negotiations – who stated in his maiden speech to Parliament: “For many years I was involved in Treaty litigation. In particular I acted for Ngai Tahu in its claim against the Crown. The proudest moment of my professional career was being at Kaikoura on 21 November 1997 when the former Prime Minister, Jim Bolger, and Sir Tipene O’Regan for Ngai Tahu signed the Deed of Settlement. Since then, Ngai Tahu has gone from strength to strength and is now a major economic and social force in the South Island.”

The Ngai Tahu Claims Settlement Act, which was passed by Parliament on the 29th September 1998, valued the settlement at $170 million – the same as Tainui’s. Since it was one of the first of the big claims to be negotiated it contained a ‘relativity clause’ to provide Ngai Tahu with 16.1 percent (17 percent for Tainui) of the value of all settlements over $1 billion in 1994 dollar terms. This was the value of the ‘fiscal envelope’, which then Treaty Minister Doug Graham argued would be sufficient to cover the cost of all settlements. Using the Reserve Bank’s inflation calculator, the $1 billion in 1994 dollars is worth around $1.54 billion today.2

With the value of completed settlements now having exceeded $1.54 billion, the relativity mechanism has been triggered and Ngai Tahu has been offered a top-up payment of $68.5 million. Although they have pocketed the money, they are disputing the amount and have entered into arbitration with the government. With the settlement process barely half way through, this tribal corporation can expect more windfall gains – possibly in the region of $250 million.3

Ngai Tahu has just announced its annual result – with assets worth $1 billion and shareholder equity of $740 million, the tribe expects their assets could be worth $4 billion by 2030. The corporation has created a complex structure for itself including 38 limited liability companies, three trusts, and a scholarship fund. Earlier this year, Dr Michael Gousmett, an independent researcher into the charitable sector, provided a guest commentary for the NZCPR, Tax-Payer Subsidised Charities – Time For Change, in which he claimed that too many big charities, including Ngai Tahu, were taking advantage of their charitable status to dodge what he believes should be legitimate tax payments.

He pointed out that 67 of Ngai Tahu’s employees earned over $100,000, with the highest paid executive earning between $680,000 and $689,000 a year: “The Te Runanga o Ngai Tahu report discloses levels of remuneration in bands of $100,000. In 2012 there were 67 employees who earned $100,000 or more, at a total cost of $12.8 million, an 18.5 per cent increase on 2011 at a cost of $10.8 million. How then is it possible for an organisation which argues that it is a charity can pay its top three earners between $1.76 and $1.79 million, or 14 per cent of the remuneration paid to the 67 employees, with the top earner receiving between $680,000 and $689,999? In 2011 there were 61 employees who earned in excess of $100,000, with the top of the remuneration band being $499,999.  This suggests that the top earner received an increase in remuneration of 38 per cent, or a maximum of $190,000 in 2012. The simple question is, why?”

According to their 2013 Annual Report, 81 employees now earn over $100,000, with the top remuneration band being $710,000 to $719,999.

But it’s not just the value and frequency of repeat treaty claims and settlements that are of concern to New Zealanders. In a disturbing development, many iwi are now demanding co-governance rights. Based on the false premise that the Treaty of Waitangi gave them partnership status with the Crown – now thoroughly debunked thanks to the work of Judge Anthony Willy (see NZCPR research paper Sovereignty and the Treaty of Waitangi) – lucrative governance rights to some of the country’s most precious natural resources are being given away to tribal interests. Or, to adapt the words of well known political commentator Chris Trotter – “private interests are muscling in on public resources, compromising the integrity of public institutions, and trampling with ill-disguised contempt upon the rights of New Zealand citizens”.4

These ‘co-management’ deals do not come cheap. Treaty Negotiations Minister, Chris Finlayson put in place the co-management deal over the Waikato River with Tainui.5 The settlement included a $20 million donation to Tainui’s Endowed Colleges Trust, a $50 million fund for “initiatives to restore and protect the relationship of Waikato-Tainui with the Waikato River including its economic, social, cultural and spiritual relationships”, and a $210 million contestable clean-up fund – paid out at $7 million per year for 30 years – to be administered by Tainui.

In addition to this $280 million taxpayer-funded commitment to co-management, a further $30 million will be paid to Tainui at $1 million a year, to fund their involvement in the co-governance process.

Is it any wonder that more and more tribes are attempting to tap into the lucrative funding streams that co-governance over New Zealand’s prime public resources can bring. Such deals can effectively set these iwi corporations up for life – and are likely to lead to plenty more opportunities for ‘full and final’ settlements in the future.

Iwi business corporations have become experts at soft-soaping the public with talk of the ‘guardianship’ of assets. But let’s not be fooled by their rhetoric. Their agenda is to get their hands on as many public assets as they can, with an eye to private commercial advantage.

Earlier this year, Ngati Tuwharetoa, the so-called ‘guardians’ of Lake Taupo, announced that they were going to start charging competitors in the New Zealand Ironman competition for swimming in the lake. They expected this would bring in around $56,000 to add to the income they already receive from commercial tourism on the lake, a share of fishing licence fees, and an annual Crown payment of $1.5 million.

A similar decision to charge some users of Lake Ellesmere was made by Ngai Tahu a few years ago. The lake was part of their 1998 Treaty settlement, and at the time assurances were given that nothing would change regarding the public’s right to use the lake. That did not stop an 8 percent levy on the earnings of commercial eel fishermen being imposed in 2009. Recreational users fear that one day they too will be required to pay an ‘iwi tax’, and warn that similar taxes will be imposed wherever riverbeds, lakebeds and foreshore areas have been included in Treaty settlements. At the time, the Minister of Fisheries’ response was to say there was nothing he could do, that it was a private matter between the public and the iwi. And there’s the rub – once these deals are done and public assets have been given to private iwi corporations, the government washes its hands of any further involvement.

And it’s not only at central government level that all of this is taking place – increasingly the demands for property and assets are occurring at local government level as well, as iwi around the country who have yet to settle their claims eye up local jewels in local authority crowns to add to their treasure chests of accumulated public resources and wealth.


Should local government assets be available for treaty settlements?   


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