Tea Towel Tanga - the true value of the Maori economy

Matthew Tukaki

I want to set a factual scene when it comes to Te Ao Maori and the economy – Maori have been trading in one form or another long before European settlement and that trade extended far beyond our domestic shores. Back then trading revolved around regional products which were exchanged over long distances by hapū and iwi. Coastal Māori offered kaimoana (seafood), and inland Māori provided berries, preserved birds and other products of the forest in return. Obsidian from Tūhua (Mayor Island), argillite from Nelson and D'Urville Island, basalt from Tahanga in the Coromandel and pounamu (greenstone or jade) from the South Island were all traded.

Following European settlement, Māori switched their focus away from trading amongst themselves to forging business associations with the new settlers. Māori supplied the towns and cities that sprang up with livestock and crops. This soon extended to developing business relationships internationally, and Māori traded in the South Pacific and Australia. As New Zealand developed as a country and the economy grew, Māori found their niche in the primary sectors of business, such as farming and fishing, preferring to remain within their own rohe (regions) on their traditional land blocks, and collectively deriving an income through agricultural activities.

This morning I attended a hui with the release of a new report into the Māori Economy with research undertaken by BERL - a report named Te Ōhanga Māori 2018. As you all know I talk a lot about the need to improve wage growth when it comes to Māori because we have to stop being so short sighted that we continue to always categorise Māori into a dependency relationship – in other words if a large number of our people are in the low skills side of the economy that what can we do to lift the skills base while at the same time increase wage growth. In other words if people are always only earning enough to keep up with the cost of living then they will never be able to put money away or increase savings, a less likely to be able to own their own home and so on. We need to change that dynamic.

My advice to the Reserve Bank Governor, economists for Treasury and others that building back better post COVID19 is not returning to the same state. So what does a new state look like?

Letsets take a look at the Maori workforce and population: The Māori population totalled 775,800 in 2018, an increase of 30 percent since 2013. This included 527,000 Māori of working age (15 years and over), an increase of 33 percent. The number of Māori in employment in 2018 totalled 329,200. This is an increase of over 105,200, or 47 percent, since 2013, including a 46 percent increase in the number of Māori employers. The labour force participation rate increased from 66.9 percent in 2013, to 70.6 percent in 2018.

Māori employment was recorded across a range of sectors in 2018, in particular:

• 38,600 in manufacturing

• 35,100 in construction

• 30,600 in health care

• 29,000 in education

• 27,200 in retail

• 22,500 in agriculture, forestry, and fishing

• 22,300 in accommodation and food services

Māori in business, as either employers or self-employed, are dominated by those in the highest skill category (skill level one) (Figure 5). Over 50 percent of Māori employers and more than 40 percent of Māori self-employed are in this category.

Now lets look at the asset base of Te Ao Maori:

In 2018, the financial value of the asset base totalled $68.7 billion comprising:

• $39.1 billion assets in the businesses of 9,850 Māori employers

• $21.0 billion assets in trusts, incorporations, and other Māori entities

• $8.6 billion assets in the businesses of 18,600 self-employed Māori.

Natural-resource based sectors continue to dominate with assets in agriculture, fishing, and forestry totalling $23.4 billion. This includes $8.6 billion in sheep and beef farming; $4.9 billion in dairy farming; $4.3 billion in forestry; $2.9 billion in fishing and aquaculture; and $2.6 billion in other agriculture (including horticulture). Other sectors with considerable assets include:

• $16.7 billion of assets in real estate services, including commercial, industrial, and residential property

• $4.9 billion of assets in the manufacturing industry, including $2.3 billion in food processing and wood and paper manufacturing

• $4.2 billion of assets in transport

• $3.1 billion in construction.

Now lets look at the state of Maori households:

There were 285,400 Māori households in 2018. The average household income from all sources was $83,200; comprising an average of $100,500 for those in their own home, and $67,600 for those renting. Over 135,000 Māori households were owner-occupied dwellings, a home ownership rate of 47.5 percent. Across the rohe, Tāmaki Makaurau has the lowest home ownership rate (42 percent), with the highest in Te Tau Ihu (54 percent). Among Māori households living in owner occupied homes, the average income was highest in Tāmaki Makaurau ($130,400), with the lowest in Te Tai Tokerau ($77,500). Among Māori households renting, the average income was again highest in Tāmaki Makaurau ($84,800), with the lowest in Kurahaupō ($52,900).

But lets look at some hard facts here. The reality is that numbers paint a certain picture when it comes to economic indicators but in all reality how much of that is translating to every day whanau on the ground and in communities. That is why we need to balance all of this off against the social data. Maori have the highest suicide rate per head of population, are more likely to be consumers of the mental health system than non-Maori, have higher rates of homelessness, are the majority impacted in respect of the child care and protection system, are more likely to be long term unemployed and have less savings or own their own homes than non-Maori moving into retirement. And it doesn’t stop there. Maori women are the most impacted and then there are our people living with a disability – either physical or intellectual.

Then there are the health indicators. Maori are more likely to have rates of cardiovascular disease, more likely to have higher rates of limb amputations as a result of diabetes, liver and kidney disease, all forms of cancer and the list goes on.

The art of understanding and planning for the future is about the overall wellbeing of the Te Ao Maori world where one set of data is not isolated on its own – economic data makes no sense without understanding the impact of social determinants and both of those can not be dealt with if we miss the important pou or pillar around what it means to be Maori – tikanga, te reo, culture, whanau, whakapapa and much more. Sustainable development is very much about the integration of all of these pillars moving as one. Therefore understanding one element of the Maori economy is understanding all of them.

So where to from here? In the coming days and weeks I will be releasing a series of new policy statements in respect of the Maori economy in draft format. These will cover:

  • Building a skilled workforce and supporting thriving industries and sustainable provinces

  • Modern workplaces for a modern workforce – how we now live work and play

  • Preparing of the changing nature of work – not leaving our middle aged and older whanau behind

  • Supporting an inclusive labour market – and importantly diversifying it

  • Wage growth – minimum wage rates not keeping pace with the cost of living – focus on skills and wage growth

  • Industry diversification – and shaping ourselves towards a 22nd century narrative

  • Whanau Fifty up – training for a second career

  • Where there is jobs growth and high demand vs low supply

  • Rethinking trades / technology, blockchain, mental health and community services

  • Our young people as our future workforce

  • The need for a cross Agency approach / bringing down the silos

  • Inserts from Te Ara and https://berl.co.nz/our-mahi/te-ohanga-maori-2018