The Māori economy plays a crucial role in driving Aotearoa New Zealand's economic success and is experiencing significant growth - this is projected to continue. Over the last ten years, the Māori asset base has also grown at a significantly faster rate than the overall economy (NZ Herald, 2022). Today the Māori economy is valued at more than NZD$70bn, and estimates suggest it will have assets worth NZD$100bn by 2030 (NZTE, 2017).
Despite this impressive growth, there are still significant challenges and opportunities ahead to achieve Māori economic rangatiratanga (self-determination), develop productivity and improve overall wellbeing. In this article, we examine some of the key factors driving growth and the areas of focus needed to sustain this progress.
Māori partnerships in the social and health sector Enabling infrastructure in the regions Economic resilience and labour Positivity in Māori leadership and changing perceptions Syndication and capital development Māori trusts and authorities
Māori partnerships in the social and health sector
Strong partnerships in the social and health sector played a significant role in mitigating the impact of COVID-19 on Māori communities. It emphasised the importance of community engagement and empowerment, as well as the use of Māori knowledge, culture and language in ensuring effective health communications. Having a culturally responsive approach in addressing health disparities and a focus on improving health outcomes for Māori communities will deliver social and economic benefits going forward.
However, many health and social sector organisations are experiencing scalability issues, particularly those that were required to quickly expand during the pandemic. While positive, this expansion comes with growing pains and the strain on governance, management and corporate structures is visible. Furthermore, the pipeline of diverse and experienced directors and senior managers within the health and social services industry is constricted.
Solutions to overcome this include developing a robust governance and management structure, investment in staff training and development, leveraging technology to streamline processes, and prioritising diversity and inclusivity in hiring to attract a wider pool of experienced individuals.
Government and private businesses can support this through funding and investment, as well as establishing mentorship and coaching programmes to develop strong governance and management structures. This can be achieved through collaboration and partnership.
In supporting health and social sector organisations, both the Government and private businesses can help improve health outcomes for communities, especially those most vulnerable or marginalised. In turn, this can stimulate economic growth and productivity, as well as avoid disruptions in service delivery and reliance on emergency funding.
Enabling infrastructure in the regions
In response to the economic challenges following the pandemic, the Government has made significant investments in public infrastructure through various targeted funding mechanisms.
These funds have helped to stimulate economic growth and create jobs across the country with specific outcomes for Māori, including:
support for Māori-led businesses such as the investment in Eastern Bay of Plenty iwi (tribe) Te Whānau-ā-Apanui to develop a mussel spat hatchery and research hub, and the investment in the Opotiki Harbour project, Whakatōhea’s mussel processing facility, and its open ocean mussel farm expansion, employing hundreds of locals.
supporting infrastructure development in communities with high Māori populations. For example, investment in the upgrade of marae facilities across the country, many of which became community havens during recent severe weather events.
However, as Aotearoa New Zealand enters challenging economic times, institutional lenders are likely to become less willing to take risks and provide lending to Māori businesses and projects. To sustain growth, there is an opportunity for the Government to create a development bank which could provide equity stakes and debt to help fund important projects that might otherwise struggle to attract private investment.
By continuing to invest in public infrastructure and expand its role as a public investor, the Government can help to stimulate economic growth, create jobs, and support Māori-led businesses and projects at a time when they need it most.
Economic resilience and labour
Economic shocks, such as a recession, can have a disproportionate impact on Māori, particularly those who are already experiencing disadvantage. As a result, Māori have a slower recovery rate which can widen existing disparities.
For example, if Māori are more likely to lose their jobs and have lower rates of re-employment, with long-term impacts on their income and financial security, this can affect their health and wellbeing, and perpetuate a cycle of disadvantage and marginalisation that is difficult to break.
While the Government recognises the importance of housing, employment, and Māori enterprise growth for improving whānau (family) wellbeing and socioeconomic outcomes, this is still viewed through a non-Māori lens. Community or specifically Māori-led approaches to addressing these issues are often not adequately supported by Government departments.
Incorporating Te Ao Māori perspectives into building resilience could involve working with Māori experts and leaders to develop policies and initiatives that reflect Māori values and culture, grounded in whānau-centred approaches to wellbeing. Establishing formal mechanisms for consultation and engagement, as well as building relationships based on trust and mutual respect, will also be critical.
PwC is seeing a growing insecurity in the workforce and labour resource. This is prevalent in regional Aotearoa New Zealand where wage growth is slowing and it is increasingly difficult to attract highly-skilled people to industry-leading roles in the agriculture, horticulture, fisheries and technology sectors.
Addressing this challenge requires government, private business, Māori authorities and industry sector groups to collaborate and share insights. This will ensure that the interests of Māori communities are included in decision-making and economic development initiatives.
Positivity in Māori leadership and changing perceptions
An increasing number of Māori are taking leadership roles in areas related to the economy and society such as business, finance, social services, and government. They are becoming increasingly influential, driving change and progress in their respective fields. This presents a chance to finally address the bias that labels Māori enterprise as unsophisticated and unwilling to adapt to changing tides.
PwC sees the opportunity for a positive and proactive domestic campaign that highlights the value of Māori business and its contribution to the economy. A campaign could showcase successful Māori businesses, their innovative practices and adaptation to market trends, combined with the positive impact they have on their communities and the wider economy. Māori authorities could play a key role in promoting it and be advocates for Māori enterprise. Industry sector groups and private businesses could also support and collaborate with Māori businesses to help them thrive.
Syndication and capital development
In recent years, several iwi syndicates have emerged as serious players in the food supply, energy, infrastructure and social services sectors, with iwi leaders seeing alignment in shared objectives and experiencing significant value in coming together to progress initiatives with shared, albeit limited, resources.
PwC has had the privilege of working with a syndicate of iwi to develop a Māori-owned telehealth centre, with national capability that already employs over 300 Māori. However, Māori businesses across many industries are attempting to raise capital for greenfield developments, yet capacity and capability is limited. The same small groups of experts are often relied on to provide those services, making it difficult for these businesses to secure the financial support and capability they need to move forward.
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Māori trusts and authorities
Māori trusts and incorporations are becoming significant contributors to the national economy, often ‘flying under the radar’ but champions in their fields. Many have "hundred million plus" balance sheets, strong governance and management, and long-term growth strategies. These groups present great potential as co-investment partners for iwi and Government, and there are several models of co-investment that could be scaled-up quickly.
In 2022, Stats NZ identified:
- 1,290 Māori authorities and 2,630 other Māori enterprises
- Māori authorities employed a total of 11,800 people while other Māori enterprises employed a total of 29,800
- A quarter of Māori authorities operated in primary industries with half of Māori farms being in the Waikato, Bay of Plenty, and Northland regions
- Māori authorities exported $760m worth of goods and other Māori enterprises exported $256m worth of goods
- The total income for Māori authorities was $5.43bn, up 14% from the 2021 financial year
- 65% of Māori authorities and 76% of other Māori enterprises had a social media presence.
Combined with a number of other Māori trusts, who may not be Māori authorities, they are a formidable collective and voice of advocacy across Aotearoa New Zealand. Effective governance, consolidation, boosted capability, and access to capital could enable them to achieve more to significantly improve land utilisation statistics, increase productivity, and drive enterprise development, particularly in regional communities. PwC has observed a collective mobilisation of these groups around sectoral priorities like food security, horticulture, forestry, energy, and dairy, as some move into a new phase of strategic forecasting and climate change adaptation initiatives.
Conclusion
It is clear that there is much potential for the continued growth and success of Māori-led economic development in Aotearoa New Zealand. By working together, with a focus on innovative solutions and sustainable outcomes, we can create a more prosperous and equitable future for all.
How we can help
PwC’s Manukura Māori team is passionate about working with iwi, Māori focused entities, and organisations to enhance Māori economic, social, cultural and environmental outcomes and help shape Aotearoa for the betterment of Māori. We are guided by our mātāpono of whakapapa, whakamana, tauutuutu, rangatiratanga, whanaungatanga and manaakitanga. Our unique power is the combination of our cultural expertise and experience, with PwC's world-leading professional services capability. As a community of solvers, we look forward to a kōrero on how we can collaborate with you.
