There are good times ahead for whanau trusts that have substantial landholdings.
I've worked with a number recently that are coming off long peppercorn leases and finally starting to get some real income.
That means better times ahead for their beneficiaries, too: maybe improvements to whanau homes, more attention tofinancial literacy and investment into profitable businesses, not to mention distributions to beneficiaries.
The trusts now have more options when it comes to deciding what to do with the land than just farming leases and housing developments.
Iwi have the ability to set up major investment opportunities and provide guidance and leadership for whanau trusts. Horticulture, aquaculture, tourism, manufacturing and IT investment could make use of underutilised Maori land -- reportedly up to 40 per cent of it.
I've noticed people taking more interest in the management of their land assets as their income increases. The reviewing of lease terms and a move to better lease rates has meant board and trustee stability and the ability to afford trust administrative and investment advice on blocks.
As the size of the bank account increases, so too does the expectation of accountability for trustees and the decision to invest or distribute funds then becomes a discussion of long-term versus short-term goals for the trust.
Trustees are now empowered with real investment responsibility and are taking interest in the consequences of their decisions.
But among the misconceptions about Maori land ownership that I've come across is the thought that the income in a whanau or Maori trust may be exempt from tax. This is not the case at all. Like any other business, tax is due on income received. Seek advice on this.
Financial reporting is important. Having good financial statements recording assets, their values, location and profitability will guide trustees' investment decisions and ensure nothing is lost. I have seen assets lost because records are inadequate.
Valuations are key to deciding a return on investment. Maori who have had long-term leases in place generally won't want to rock the boat and negotiate a better return, but get a valuation to support your decision to negotiate.
Maori land can be difficult to sell or lend against, but that is not a bad thing. But then it's never been about the money has it? This is just a bonus.
