Date posted: 1/12/2016 5 min read

Hinerangi Raumati on the way forward for Maori businesses

Chartered accountants are contributing vital financial expertise to New Zealand’s multi-billion-dollar Māori economy

In brief

  • Increased financial literacy is essential to the growth of the Māori economy
  • Culture belongs in business, and the Māori economy is building capability and confidence
  • The Māori economic asset base has grown from NZ$1b to NZ$40b in 20 years

By Yvonne Tahana

In New Zealand, the growing pains of Māori businesses have been excruciatingly public at times.

Early in its corporate life the Tainui iwi [tribe] of the central North Island lost NZ$40m — memorable to the public as Tainui had invested in the Auckland Warriors (as the trans-Tasman rugby league team was then known).

Perhaps unfairly, memory of such failure has a long shelf life. But that loss is a yawn to tribal members, who are well past it given Tainui’s commercial performance over the past decade. This has seen its initial NZ$170m settlement grow into an asset base worth more than NZ$1b.

It’s not the worst business failure the Māori economy has seen, but it was the first and an early benchmark for bad business practice in a new part of the economy that was not well understood by the public.

Hinerangi Raumati FCA had nothing to do with that investment but did spend time at Tainui Group Holdings as a chief financial officer. She was also part of a new team brought in to clean up a NZ$31m loss at Parininihi ki Waitotara (PkW) when an Australian property development went wrong.

In both, the conditions for failure were simple. Decision makers were out of their depth, Raumati says.

“People were making investment decisions in sectors that they knew nothing about,” she says.

“The Warriors — someone would have been making an emotional decision.

“PkW was the same. It went from doing small property developments (one was NZ$10m) to a NZ$100m development. They tried to manage it from a distance and it was just doomed to fail.”

Investing in people

Raumati works in the mainstream and the Māori business worlds. She was recently appointed to Auckland Council Investments — the NZ$2.3b body owns and manages the city’s ports and airport. She is also the chair of PkW, a massive Māori farming venture in Taranaki which is the largest regional supplier of milk to Fonterra.

In her downtime she sits on the boards of fishing giants Te Ohu Kaimoana and Aotearoa Fisheries. With tribal affiliations to Waikato and Ngati Mutunga, she’s had an insider’s view of Māoridom’s economic journey over 20 years.

She’s been there, she says wryly, in good times and when the proverbial has hit the fan. The lesson that Māori tribal businesses have learned, she says, is that they need appropriate financial expertise.

“You’ve really got to have capability — most of us don’t, so we’ve got to invest in building the capability of our people.”

To that end, many iwi have educational grants at tertiary level for school leavers. But it’s not enough, she says.

“They’ve got to invest in those in their 30s and 40s if they want to funnel their own [people] into management and governance roles.”

In the interim, getting in external financial expertise is fine. Failure to have clear political/business boundaries can be catastrophic. In 2012, Ngati Tama, following a small cohort of iwi leaders with little experience in their chosen investments, lost all of its NZ$14.5m settlement.

Raumati’s nothing if not laconic.

“If you can’t manage the money, that’s a big problem.”

Success story

Until recently the Māori economy, and what it contributes to the larger story of NZ Inc, was largely unaccounted for.

In 2010 government Māori development ministry Te Puni Kokiri (TPK) was the first to commission research. By then Tainui and South Island tribe Ngāi Tahu had become powerful machines in their respective regions. Both now operate successful billion-dollar enterprises with property, tourism, seafood, venture capital interests.

There are also less visible Māori trusts and incorporations that existed before the modern settlement process ramped up in the 1990s. They were built over the past century by pooling land shares to create sizeable entities and they rival some of the big settlement iwi in scale with interests in geothermal power plants, property development, technology and communications.

The 2010 TPK research found a total asset base worth NZ$36.9m. By 2013 this had increased to NZ$42.6b. GDP from Māori economy producers totalled NZ$11b, dominated by income from the primary sector.

There are challenges. While the asset base is improving in size and value, the productivity of those assets remains below average.

Economic research consultancy BERL has noted: “The nature of many of the land-based assets (restricted access, limited potential, and/or difficult management/ownership structures) tends to make this below-average outcome inevitable. However, the broadening of Māori asset interests across a range of sectors (processing and manufacturing, tourism, property, education, health and social service provision, along with SMEs in building and construction, manufacturing, retail, transport and other sectors) lessens this inevitability.”

History not on repeat

Competition often defines the relationship between New Zealand and Australia, but it’s a feature missing from Māori tribal businesses when they talk about the potential for Indigenous corporations to flourish in Australia.

For players such as Raumati, there’s a strong sense that whatever can be done from Aotearoa’s side of the ditch to smooth the way for those building Australian Indigenous businesses, should be done.

Unspoken bonds exist through the shared experience of colonialism and its attendant baggage: land, language and identity loss.

There is no arrogance when Raumati says that Māori support for Indigenous businesses in Australia is unconditional.

“Our support is moral – we can’t be competitive in this space. We’re just so much bigger, so much more developed and it’s our job to help them.”

KPMG’s Joe Hanita FCA used to work for Raumati at Te Wānanga o Aotearoa, a national tertiary institute started by Māori. They share a passion for indigenous development.

Hanita says the conditions for success are pretty simple.

“You need a clear, long-term aspirational strategy which influences your decision making.

“All our [Māori] organisations have to achieve the aspirations of our people. At the end of the day we’re striving to make sure they ultimately benefit.”

Iwi businesses need to be around for as long as their members are — with high birth rates the outlook has to be forever.

That intergenerational approach to increasing wealth and wellbeing has affected the way Māori incorporations have acted.

“We have been traditionally inherently conservative. When we receive [settlement] funds back we tend to pool all of our money into funds, which is probably a wise thing to do, and into certain asset types. What we’re doing is we are making sure we don’t erode the asset base because it has to last for future generations.”

But iwi businesses are changing the way they operate. Most recognise that the eggs-in-one-basket approach will not do enough to improve wellbeing for Māori who find themselves at the bottom of plenty of socio-economic indicators.

“Ngāi Tahu and Tainui [incorporations] are nothing like they were when they started 20 years ago,” says Hanita.

“They have got a quite a sophisticated level of maturity and that’s part of the business lifecycle. As we build capability and confidence, we’re diversifying and evolving.”

Conservative doesn’t have to mean completely risk adverse. It just means thinking about risk and investment a little differently.

Hanita says Whai Rawa, Ngāi Tahu’s NZ$44m matched savings scheme, which works off the back of a managed fund, is an example of a willingness to try something a little different that will have lasting impacts on members.

He hopes that our “Australian cousins” know that, at every level, culture belongs in business. Rangatiratanga, kaitiakitanga and hauora — Māori concepts of leadership, care and wellbeing — are a core part of the way he works. And he’s proud of it.

We’re indigenous, we’re diverse and we bring culture to work. We have to change the old pale, stale and male view.

Sharing economy?

Tina Porou is the head of sustainability at Contact Energy. She’s also worked across iwi trusts and incorporations.

Māori have as much to learn from other native cultures as they have to give, she says.

“You can’t put a Māori framework on an Aboriginal [Indigenous] problem but you can have conversations about how it is we can grow together.”

Porou has consulted in Australia and is looking at a model used there to get more Indigenous people into corporate roles.

“I’ve had conversations with kuia [elderly] over there — the conversations I could imagine my old people having 50 or 60 years ago. So they are behind.

“But it was humbling and it was a stark reminder to me that we shouldn’t forget the fight. And we shouldn’t be so ‘entitled’.”

Just like Hanita, Porou is a big believer in knowing and being who you are. It’s a point of difference that should never be undervalued, she says.

That belief was rammed home to her on a Stanford University boot camp. Part of it saw her visit IDEO, one of the pre-eminent design companies in the world. At the end, the 45-strong group stood up to waiata [sing] to the president, a practice ingrained there.

The IDEO President and CEO Tim Brown blogged: “This group was deeply in touch with why they were in business and how their culture brought meaning to their work. It made me realise that in most other parts of the world we consciously try to separate our cultural experiences from our work lives, sidelining them to a trip to the theatre, or to the museum.

“It made me wonder: how much more meaningful might our work be if it was more closely interwoven with our culture?”

That made her smile, Porou says.

“I think my biggest thing, and we all see it because we’re working in a capitalist society, is don’t compromise your indigeneity for capitalism. Take it with you into the boardroom and don’t forget that diversity in the business world is king.”

The new Māori economy

The Treaty of Waitangi was signed in 1840 between British settlers and Māori chiefs.

It’s been called New Zealand’s founding document and was an agreement which gave the Crown the right to govern while promising Māori full rights to their property including lands, forests and fisheries.

A century of fairly consistent land loss by Māori, including mass confiscations, followed the signing of the Treaty. Protest movements and court action during the 1970s and 1980s led to an acceptance that cultural and commercial redress was necessary for historical injustices.

Successive New Zealand governments have negotiated multi-million-dollar deals with iwi (Māori tribes) in order to deal with Treaty breaches.

Over NZ$1b has been transferred to 50 iwi since the first NZ$170m deal was struck between the National government and Tainui in 1995. This has grown into a Māori economic asset base worth more than NZ$40b.

Yvonne Tahana is an award-winning journalist and broadcaster.

NgĀ Kaitatau Māori o Aotearoa

Chartered Accountants ANZ is proud to partner with Ngā Kaitatau Māori o Aotearoa — the National Māori Accountants Network — to assist Māori to excel in commerce and contribute to the successful economic development of Māori. The Network offers mentoring support, scholarships, networking and conferences including its annual Hui-a-Tau. Contact Wayne.Panapa@wel.co.nz or joe.consedine@charteredaccountantsanz.com

This article was first published in the December 2015 issue of Acuity magazine.