Economics: Measuring the Maori Economy

Question: who was the first Maori chairman of the Business Roundtable?

Your columnist has anticipated the answer from most readers, if not all. It was Rob McLeod, the incumbent chairman.

But McLeod raised doubts about his claim to the title when he was questioned on the Maori news programme, Mana News, about Roundtable plans to examine the role of Maori in the country’s economy. The Roundtable will sponsor the research, bringing together group of interested and qualified people from various aspects of business and Maoridom. The objective, he says, is to produce report that “will give good insights into what works economically for Maori, learning essentially from the experiences of history, so that we can do proper analysis of that history and try to develop policies that are appropriate for the future”.

A committee chaired by McLeod was appointed to oversee the project. Half its members were from the Roundtable; the rest were from the Maori business sector. The other committee members included Ralph Norris, McLeod’s predecessor as head of the Roundtable, “who’s well known to most New Zealanders [and] who, by the way, is Ngati Hine”.

This raises delicate question: is Mr Norris eligible to be classified as “Maori”, because of this Ngati Hine whakapapa, and therefore was he the first Maori chairman of the Roundtable? If not, how much Maori blood does one need to lay claim to the title?

Defining “Maori” is not as easy as it might seem. The Statistics Department can attest to the difficulty of the challenge. It has been under political pressure to come up with data to help identify problems and monitor the success of remedial action, in an era when the Government is trying to “close the gaps” without officially declaring that “closing the gaps” is its policy.

Once “Maori” people can be classified comfortably for statistical purposes, the next challenge is to define “Maori” business. Is it owned and staffed by Maori and does it deal only with Maori? Or is there blurring of the lines somewhere?

The implications of this for policy-making purposes can be illustrated with reference to recent survey among Maori about tourism and the development of that industry. The first question was simple: should Maori tourism be developed exclusively by Maori, or should there be non-Maori involvement?

The Maori respondents were evenly divided. The reason for their 50:50 response essentially is that the Maori who were being questioned wanted their non-Maori wives or husbands to help them run their businesses.

The ethnic mix of family similarly can distort survey responses to questions about households. survey questionnaire might find households labelled “Maori” have no income from Maori. Typically, the reason could be that the Maori member of the household is mother who stays home with the children and the breadwinner is non-Maori.

Just as these “labelling” problems complicate the job of gathering statistics, so the definition of “Maori” frustrates attempts to measure and discuss the “Maori economy”.

A report entitled “Maori Economic Development – Te Ohanga Whanaketanga Maori”, was prepared by the Institute of Economic Research for publication by the Ministry of Maori Affairs early this year. Ministry boss Leith Comer described it as document which “provides for the first time solid definition of the ‘Maori economy’ and its value to New Zealand”.

For the purposes of the institute’s study, the “Maori economy” was defined as collectively owned land trusts and incorporations, Maori-owned businesses, and the property owned by Maori households. The researchers found “the Maori economy” is relatively small nationally, measured in production terms ($1.9 billion year) although it was “quite profitable, earning about $826 million in operating surplus annually or two percent of national operating surplus”.

Inevitably, the report raises several questions. Example: table shows ages and salaries of Maori households amount to $4.3 billion, but the Maori economy pays its employees $288 million (annually, presumably, although the table did not say so). And so mere seven percent or so of Maori are working for the Maori enterprises that produced the Maori economy’s $1.9 billion of output, which in turn amounts to just 1.4 percent of the country’s GDP.

There’s an obvious hunger among business people to learn more about the Maori economy, as evidenced by the Business Roundtable project.

The Roundtable will use case-study approach and look at an array of Maori institutions to learn about their performance and distil some lessons for policy-shaping purposes about what works and what does not. Fair enough. The Roundtable is policy development body and Maori comprise around 600,000 of the population – depending on the definition. Thus their contribution to the country’s economic performance is important.

But how important will be hard to measure.

Bob Edlin is Management’s regular economics writer.

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