Sunday, November 4, 2012
Mike Butler: Top-ups to make richest tribes richer
The two richest tribes will become $138.5-million richer since treaty settlement top-ups were triggered, the Otago Daily Times reported this week, with a former tribal negotiator in charge of handing out the settlement spoils. (1)
The Ngai Tahu and Waikato-Tainui tribal corporations, which operate as charitable trusts, negotiated relativity clauses of the sort that used to characterise union wage negotiations, entitling each to a percentage of all future treaty settlements once they exceed $1-billion in 1994 dollar terms. The government has calculated that the amount payable to Ngai Tahu was $45.6-million, or $68.5-million when adjusted for inflation. Waikato Tainui will receive a cash payment of $70-million.
The Otago Daily Times is the only mainstream media outlet to have chased this story, although their story was published in the New Zealand Herald. Persistent questioning got the Crown and South Island-based tribe Ngai Tahu to confirm that the relativity clause was triggered for the year ended June 30.
The four-month delay of an announcement from Treaty Negotiations Minister Chris Finlayson, who in his life before parliament acted for Ngai Tahu in its claim against the Crown, shows the extent to which he and his government have gone quiet on the issue.
Under the National-led government, the Office of Treaty Settlements had stopped releasing regular settlements totals in February 2010. In October of last year, I asked under the Official Information Act whether any payments had been made under the relativity mechanism.
I finally received a reply on March 22 this year, the day the Otago Daily Times published a report saying the $1-billion figure was likely to be reached this year. The reply confirmed no such payments had been made and said no information would be released on the total value of settlements.
Governments argue that the settlements provide a financial base and are good for the economy but since both tribes are permitted to operate as charitable trusts, they pay little tax, so there is little return for the government, which means little return for the people of New Zealand.
Settlement proceeds went to set up tribal businesses that operate as charities, but as you can see from annual reports, around 75 percent of the profit goes into the business. This year, the Ngai Tahu Charitable Trust reported a profit of $95.66-million and distributed $26.26-million to the tribe, including $240,000 to each of the tribe’s 18 runanga in the South Island. (2) In 2010 year, Tainui Group Holdings posted a net profit of $39.9-million and distributed an $11-million dividend to its sole shareholder Waikato-Tainui Te Kauhanganui Incorporated. (3) This would indicate that the purpose of the businesses is commercial rather than charitable.
While both tribes are receiving top-ups, both have received a number of earlier settlements, none of which were mentioned in the Waikato-Tainui settlement in 1995 and the Ngai Tahu settlement in 1998.
Waikato, a tribe that fought against the government, lost, and had land confiscated, received annual payments of £3000 since the 1926 Sim inquiry ruled that confiscations in were excessive. The Waikato-Maniapoto Maori Claims Settlement Act 1946 was a final settlement of grievances over the confiscations and set up the Tainui Maori Trust Board to receive ₤5000 a year in perpetuity plus a further ₤5000 and £1000 a year for 45 years. Tainui received £4155 in 1948 as part of a surplus lands settlement. (4)
Ngai Tahu, the tribe that sold most of the South Island to the government and disputed the arrangements ever since, has received five settlements for one initial complaint -- for disputed boundaries and allegedly inadequate reserves related to the 1848 Kemp purchase of 20-million acres.
The first settlement was in 1868, a Native Land Court judge reserved a further 4930 acres (1995ha) in Canterbury and Otago, and set aside a number of small fisheries easements. The South Island Landless Natives Act 1906, which granted 142,463 acres (57652ha) of land to settle 4063 “landless” Maori was Ngai Tahu’s second settlement. (5)
The Ngai Tahu Claim Settlement Act 1944, which passed on December 15, 1944, which awarded ₤300,000, payable at a rate of ₤10,000 a year for 30 years, was Ngai Tahu’s third settlement. Ngai Tahu’s fourth settlement came soon after 1969, when the Ngai Tahu Trust Board petitioned parliament asking that the 1944 Act be revoked and new legislation enacted providing for an in-perpetuity payment of $20,000 a year as a full and final settlement of the tribe’s claim. (6)
Ngai Tahu’s $170-million settlement in 1998 was their fifth settlement. That deal included 63 commercial properties, 116 farms totalling 96,426ha, 34 forests totalling 174,930ha, the sale and leaseback of seven commercial properties, the right of first refusal to buy four major South Island airports and Timberlands West Coast, plus other properties. (7)
Why did the National government under Prime Minister Jim Bolger enter into a deal that included relativity clauses that mean, for the 50-year period between 1994 and 2044, for every dollar paid out in treaty settlements over $1-billion (valued in 1994 dollars) Ngai Tahu can claim 16.1 percent and Waikato-Tainui 17 percent?
During negotiations, the Bolger government was trying to sell the idea that total historical settlements should be capped at $1-billion. Although vehement tribal opposition meant the “fiscal cap” was dropped, the settlement amounts were negotiated on the assumption that the total may end up around $1-billion. Sir Douglas Graham, who was the Treaty Negotiations Minister, said: “let’s see what everyone gets paid eventually and if it comes to more than $1 billion then it’s only fair that you get a top up so that it remains at 17 percent.” (8)
Tribal negotiators could see the obvious logic of the top-up clauses so accepted. Sir Douglas appeared not to understand that by settling early Ngai Tahu and Waikato-Tainui gained two advantages -- use of money while other tribes who settled later or are still waiting to settle missed out on, plus relativity clauses, that other tribes also missed out on.
By investing their funds, and by registering as charities and gaining a competitive advantage over other similar businesses, the two favoured tribes have vastly increased the financial worth of their asset base and have no genuine need of Sir Douglas’s top-ups.
Finlayson used to boast about his time working for Ngai Tahu. In the Sunday Star-Times of May 30, 2010, Finlayson said, “I used to love going to the office in the morning when we were suing the Crown … Ngai Tahu mastered the art of aggressive litigation, whether it was suing the Waitangi Tribunal and Doug Graham or the Director-General of Conservation. It was ‘take no prisoners.’”
Now Finlayson is on the other side as treaty negotiations minister, here are a couple of questions for him to answer:
Is it fair, on other tribes, on the government, and on the people of New Zealand, to allow Waikato-Tainui and Ngai Tahu, the two richest tribes, to gouge 22 percent of all subsequent settlements for the next 32 years?
Is it fair for tribal corporations to be allowed to trade as charities?
Sources: 1. Iwi to get cash top-up as $1b mark hit, NZ Herald, November 3, 2012. http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=10844813
2. Ngai Tahu looks to farms, rebuild, The Dominion Post, October 2, 2012
3. Tainui Group Holdings. http://www.tgh.co.nz/default.asp?sid=11&cid=13&aid=
4. Settlements of Major Maori Claims in the 1940s, Richard Hill, Department of Justice, Wellington, 1989. http://www.nzcpr.com/Richard Hill’s Report.pdf
5. Ngai Tahu Land Report, http://www.waitangi-tribunal.govt.nz/scripts/reports/reports/27/48D0AE4D-9734-410D-B1EE-14EB761D3F49.pdf
6. Settlements of Major Maori Claims in the 1940s, Richard Hill, Department of Justice, Wellington. 1989. http://www.nzcpr.com/Richard Hill’s Report.pdf
7. Treaty Transparency. http://www.nzcpr.com/TreatyTransparencyResearchReport2012.pdf
8. Finance losses pale before treaty deal, Michael Coote, National Business Review, Friday April 20, 2012, http://www.nbr.co.nz/article/finance-losses-pale-treaty-deal-117233
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