Govt close to $1b Treaty settlement threshold

Mark Solomon, Ngai Tahu leader. Photo / Getty Images

The Government is on the brink of a $1 billion Treaty settlement threshold which, once triggered, will entitle Waikato-Tainui and Ngai Tahu to extra multimillion-dollar payouts linked to their historic deals.

Both iwi were at the vanguard of settlements in the 1990s. Tough negotiating resulted in "relativity clauses", which outline that once governments spend $1 billion measured in 1994 dollars, each receives more cash.

Waikato-Tainui receives 17 per cent of the value of remaining deals which go over it, while Ngai Tahu receives 16.1 per cent.

The Office of Treaty Settlements (OTS) says $1.22 billion has been spent on 46 deals over 17 years. The Herald has converted that into 1994 dollars and it works out at $961 million. It is understood the figure is on par with official calculations, which have not been made public.

That means that a big settlement such as one for Tuhoe at $120 million could easily push the government over the threshold.

Some iwi on the list, such as Te Rarawa, are yet to receive any cash from their settlement because their deals haven't been enacted in law. However, the Herald understands relativity is calculated from the time a deed - which is an interim step along the settlement journey - is signed. If fisheries and various aquaculture settlements were included, the mechanism could be argued to be in play now.

Excluded from the Herald calculation is the $170 million Sealord fisheries deal because it was completed in 1992, although it is not specifically disqualified in the relevant legislation. Similar uncertainty remains in relation to $105 million spent on various aquaculture settlements because officials may count it as a contemporary claim not related to historical land-loss issues.

The fact that negotiations between the tribes and Crown over the figure have not started suggests those settlements are not being counted by OTS.

Treaty Negotiations Minister Christopher Finlayson would not be interviewed, but his office told the Otago Daily Times last month that it was possible the relativity mechanism would be hit this year.

"However, it would not be appropriate to comment on the forecast year of triggering, prior to advising Waikato-Tainui and Ngai Tahu," he said.

Emphasising just how sensitive the matter is politically, the Office of Treaty Settlements has stopped reporting in its quarterly updates the total spend.

It is looming as an issue which will need careful management as it comes against cost-cutting drives across the public sector and while the government struggles to rein in the deficit.

Political commentator Dr Maria Bargh said she expected heated opposition from some quarters about the extra payments.

However, the total current cost suggested that even though the hated "fiscal envelope" proposal - where Maori were told Treaty claim settlements were to be capped at $1 billion - was officially abandoned in 1996, it appeared that successive governments had aimed closely for that mark.

"To some extent the Crown has achieved its aims, which is really to keep it close to the $1 billion mark," Dr Bargh said. "It's one of the benchmarks they've used to decide how to rationalise who was going to get what, and how much."

It was an unfair unofficial policy because it was linked to fiscal imperatives rather than justice outcomes, she said. With tribes across the Auckland, Hauraki, Tuhoe and Ngapuhi areas yet to complete settlement, there would be a legitimate fear on the part of iwi that the value of their deals would be held down to keep the relativity payouts manageable.