The intergenerational challenge: Balancing present and future needs

September 2014

Business Consulting

Commercial Law

Economic Development

Why?

Source: Tuia Group Mike Taitoko

Our past....

There is a shift occurring• Deficit to potential

• Grievance to forward-looking

• Compliance to performance

• Adversarial to collaborative

• Passive to active

• Capability & capacity

• Time & exposure

• Focus and emphasis is shifting!

The Māori economy is growing fast

2006

$16.4bn(estimate)

2010

$36.9bn

$10.6bnInstitutions

$5.4bnSelf-employed

$20.8bnEmployers

Māori contribution to NZ’s Primary Sector

National sheep and beef stock estimates(Source: MAF, 2011)

10 -15%

37%

NZ total fish quota

8-10%

National milk solids production(Source: MAF, 2011)

Pre 1990 forests

36%

A snapshot of Māori

Series1

Increasing Māori Asset Base

Decreasing Māori Wellbeing

Valu

e

Time

Disparity between our economic growth and social wellbeing

Māori have a youthful population

Source: Statistics New Zealand (2013)

Investing in young Māori In comparison to the total NZ

population

Understanding the Maori Demographic

2006

$16.4bn(estimate)

$10.6bnInstitutions

$5.4bnSelf-employed

$20.8bnEmployers

80% of Maori land isunderperforming orunutilised.

The opportunity

1.5m hectaresMāori freehold land

Well developed(300,000ha)

Unutilised(600,000ha)

Under performing(600,000ha)

Potential is hugeLifting performance to average industry benchmark levels would bring

over 10 years:

• $8 billion additional gross output

• 3,600 new jobs for the primary sector

• $3.7 billion contribution to GDP

But

• Just under $3 billion investment required

The task is large• The task is too big for us to do it by ourselves• For example, in the East Coast region• Maori population of 47%• 7 of 11 areas score 10 on the scale of relative deprivation• Median Maori income for the district is $3,100 per annum lower

than the regional median – up to $6,100 per annum in the rural East Coast

• There is a disproportionately older population in the rural East Coast

• experienced negative population growth since the 2006 census• has generally poor infrastructure and public services

We are in this waka together

• If we are going to make a difference we cannot do it by ourselves - and shouldn’t be trying to do so

• We are still capital constrained

• We largely occupy the producer space and, with the exception of the fishing industry, have limited investment in other parts of the supply chain and value chain

• The survival of our communities is closely connected to the success of the wider community, especially in the regions

We have something to Offer

Maori Inc NZ Inc Aotearoa

Inc

• New Zealand needs new solutions• Governance MUST support and drive change• Our interests are aligned• We want to do better together

Maori/Iwi and entities have sufficient economic security to be able to participate in, and choose from, all consumer and

investor options available

In so doing, they choose to identify culturally as Maori/Iwi

Maori Success

Reframing successEconomic

SocialEnvironmental

Cultural

Reframing success

Social

Cultural

Maori Asset Ownership Objectives• Perpetual (taonga) Assets vs other assets• How to avoid commercial or environmental outcomes where

involuntary loss of ownership and control occurs• Appropriate risk and management processes• Does perpetual ownership and control over certain assets is a Maori

objective that shapes attitudes and behaviour of Maori owners in a way that is significantly different from the norm.

“The trustees of endowed institutions are the guardians of the future against the claims of the present. Their task in managing the endowment is to preserve equity among generations.”

James Tobin 1974

1.5 million hectares Māori land5.5% of NZ total land mass

Mobilising Māori land and assets to create this generation’s legacy.

Utaina te waka, hāpainga ko te hoe, kia tuputupu te whai oranga.

Our vision

Connect with

our people

Capitaliseassets

Grow assets

Connect

37countries

Capitalise

Capitalise

Grow – opportunities

Mobilising Maori Assets

Capabilitypeople and the Assets

Collaborationat all levels

Commitmentto a long term strategy

Capitalfinancial and non financial resources

Conclusion• We face the dilemma of a growing asset base without increased overall

well-being for Maori• The future for Māori economic development and growth though is

brighter than ever• When balancing present and future needs we need to consider:

• The quadruple bottom line – financial, environmental, cultural and social

• The aspirations of this generation, and the legacy we want to leave

• Investment in our capability – workforce education, management and governance

• Increased collaboration among Maori and non Maori – skills, capital, partnerships

• The role of leadership

He waka eke noaWe are all of us in this together