Prospects appear even brighter for Maori economic renaissance

Selwyn Hayes, EY Tahi, has big expectations for the Maori economy, now estimated to be worth about $40 billion. Photo / Christine Cornege

Three trail-blazing iwi now have assets valued at $2.7 billion but in the next few years, 30 to 40 will emerge with that financial firepower, one expert says.

Selwyn Hayes runs EY Tahi, a Maori-focused advisory service and he has big expectations for the Maori economy, now estimated to be worth about $40 billion. That could grow to more than $100 billion in the next few years, he estimates.

In the meantime, other iwi can take heart from the progress of Aotearoa's biggest iwi powerhouses Ngai Tahu, Waikato Tainui and Ngati Whatua Orakei, says Hayes, a founding chair of Nga Kaitatau Maori o Aotearoa (National Maori Accountants Network).

"These are mature organisations that are growing. Those three iwi are the pathfinders. They're pioneering iwi so in 10 year's time, there'll be 30 to 40 others that will have over $1 billion in assets," says the Maori sector leader and tax partner.

Maori land entities like Tuaropaki Trust, Wakatu Inc, Parininihi ki Waitotara, Lake Taupo Forest Trust, Tauhara North No. 2 and Wairarapa Moana Inc are a significant part of the Maori economy when it comes to collective organisations and the focus on iwi or tribal organisations is only part of the true story, Hayes said.

Tourists enjoy a jetboat ride on the Shotover Jet, near Queenstown. The jet business is part of Ngai Tahu's tourism investments. Photo / Ross Setford

Pan-tribal organisations like Te Ohu Kaimoana, Aotearoa Fisheries, Te Wananga o Aotearoa, Te Tumu Paeroa and Crown Forestry Rental Trust are other big economic forces, he said.

Leon Wijohn, a Deloitte private partner and the firm's national Maori business sector leader, said Maori businesses were forming an increasingly significant and growing part of the economy.

As a reflection of that, for the first time last year the Deloitte Top 200 included a new separate list of the nine top Maori business entities based on total asset value although Wijohn said he had a list far bigger than just nine. However, not all entites would agree to be on the list, he said.

"We had enough for a top 20 but after the nine, there were quite a few that didn't want their details published, even though you can access them online," he said.

Like Hayes, Wijohn said the Maori economy would continue to grow and outstrip the market.

"If you're developing a mainstream business in New Zealand, it gets to a certain size where it gets sold off overseas but the Maori business, even if they start to branch off overseas, they're never going to relocate themselves offshore. Maori organisations will have their base in New Zealand," Wijohn said.

We're getting close to coming through this grievance mode where the focus has been on treaty settlements and you will see the focus turn towards economic development.

Leon Wijohn, Deloitte

He can also see a cross-over phase, where Treaty of Waitangi settlements begin to draw to an end and iwi move into a new and entirely different phase.

"We're getting close to coming through this grievance mode where the focus has been on treaty settlements and you will see the focus turn towards economic development. The grievance focus takes up so much resource. So there are some interesting things happening now," Wijohn said.

But not all has gone well in the world of Maori finances lately. Last month, it was reported that the Tuwharetoa Settlement Trust's $66 million Treaty of Waitangi was reduced to $16 million. An inquiry found bad loans and other poor investment decisions were responsible for the loss suffered by the trust, established in 2009 to handle a share of the landmark Treelords settlement, which was the largest Treaty settlement at the time.

The scale of growth at the biggest iwi, Ngai Tahu, shows the way forward: equipt up $197.74 million annually from 2013's $877.26 million to $1.075 billion last year, the annual report showed.

The new Novotel Auckland Airport was officially opened on Friday 27 May 2011. The hotel is a joint venture between Tainui Group Holdings, which owns a 70pc stake, the Airport and Accor. Photo / NZME.

Close behind is Waikato-Tainui's equity growth from $704.7 million in 2013 to $783.7 million and asset growth from $925.1 million to $1.1 billion.

It cited the acquisition of Hamilton Riverview Hotel and investment in Waikato Milking Systems as a highlight of last year's growth.

Ngati Whatua Orakei's commercial arm, Whai Rawa, grew its assets from $553,823,643 to $606,216,528 and it has become a strong cash generator, declaring $18.5 million lease of investment property in its cashflow - rich annual pickings from Quay Park apartment and office block leasehold arrangements on a 20ha block.

Last year, Whai Rawa struck a leasehold deal on its 4.1ha Wakakura land at Devonport with Ryman Healthcare, in which southern iwi Ngai Tahu holds a big stake.

So a strange twist, the iwi have become so financially powerful that one is enriching another, as their commercial arms become entwined.