Aspirations for the Māori Economy and Ahuwhenua
FEDERATION OF MĀORI AUTHORITIES – ANNUAL CONFERENCE
Thank you for the opportunity to be here today
I thought I would use the opportunity to give you a sense of the direction of travel across my portfolios and how some of that work intersects with your interests.
First on the Trade Front;
Our partnership with ASEAN is approaching its 45th Anniversary next year.
Since the beginnings of that partnership we have cooperated intensively with ASEAN on the international rules and norms which today support and bolster security and economic integration in the Asia-Pacific region. And we continue to look towards further strengthening of our political cooperation with ASEAN. Important initiatives include: the negotiation of a regional Air Services Agreement to improve connectivity; and the negotiation of a new ASEAN-New Zealand Plan of Action for 2021-2025 which will include a series of cooperation programmes. Both these initiatives will add to momentum in our people-to-people and our business links. South East Asia is one of the world’s fastest growing markets. As a bloc, ASEAN is our fourth largest trading partner, home to 625 million people, a trading relationship worth more than $18 billion per year, and one which has grown by two thirds in the last decade. The fact that our trading relationship has grown significantly in the last ten years is no coincidence. International trade rules have played an important part in that and in particular the ASEAN-Australia-NZ Free Trade Agreement which was signed 10 years ago known as AANZFTA.
This agreement was a milestone in our relationship with ASEAN. It originated out of the desire to link our unique and special partnership with Australia to the wider Asia-Pacific region. It took five years to negotiate and was the first time ASEAN had negotiated a free trade agreement as a single bloc. It was our first large plurilateral trade agreement and our first time gaining preferential market access to Indonesia, Viet Nam, the Philippines, Laos and Myanmar. This access has resulted in a surge of our primary sector exports in the region. Notably, our seafood and horticulture sectors now export 20% more products to ASEAN than they did ten years ago. Our dairy sector has also profited from lower barriers to entry; ASEAN is now one of our largest markets for dairy products.
Another practical example is kiwifruit. As part of AANZFTA, the Philippines eliminated its 7% tariff on New Zealand kiwifruit exports in 2011. Over the same period, those exports grew by over 350% to around $4 million today. Exporters from our main competitor in that market, the US, face a 7% tariff for their product. Therefore for every $1000 worth of kiwifruit we send to the Philippines our exporters are $70 better off compared to our competitors. Given that we’re currently exporting $4 million, that’s $280,000 our growers save annually on tariffs. It’s not surprising therefore that our closest competitor in that market is exporting less than a third of New Zealand by value. Meanwhile, Chile, another significant kiwifruit competitor without a trade deal with the Philippines is effectively shut out of that market.
Similarly, as part of AANZFTA, the 5% tariffs on our beef exports to Indonesia were removed whereas the European Union continues to face a 5% tariff. Likewise our mussels can enter the Indonesian market duty free, compared to competitors from the United States who are still required to pay a 5% tariff. A 5% tariff may not seem like much. But for small businesses in a competitive global market, a 5% edge can sometimes mean the difference between millions of dollars in trade or none at all. It can be the difference between success or failure.
By next year, tariffs on almost all our exports to Indonesia, Malaysia, the Philippines and Viet Nam will have been removed. This means that most of our dairy and beef, and all of our apple and kiwifruit exporters will no longer have to pay additional costs at the border. That will be of direct benefit to New Zealand businesses, many of them Māori businesses. And it will benefit the staff that are employed and the communities they live in – whether that be in our cities or in our regions across Aotearoa.
AANZFTA has also led to a phenomenal rise in services exports to ASEAN. Our services exports have increased by more than 50% since 2012, directly contributing to $14 million of growth in our IT industry.
Beyond goods and services, AANZFTA has helped connect New Zealanders to ASEAN and enabled us to share our wealth of experiences and knowledge. There are other aspects of the agreement that advantage our ability to invest and build capacity and skills across governments to improve the ease and assurance of products traded between countries which strengthens our respective reputation in each others markets.
As we are working to update and upgrade that agreement we remain focussed to achieve economic development which is productive, sustainable and inclusive for all New Zealanders. The upgrade won’t renegotiate goods tariffs or rules on intellectual property. Instead modernising the agreement will improve outcomes in many other areas including rules of origin, customs, services, e-commerce, investment, competition and government procurement. We also want to begin discussions on how we can use trade to foster sustainable development. Improvements in these areas will provide further opportunities for our growing data and services sectors and make it easier for small businesses to either get involved or increase their involvement in international trade. The improvements will also help ensure AANZFTA is fit for purpose in an unpredictable and challenging trading environment.
I have focussed on the ASEAN relationship because there is significant opportunity to be leveraged in the Māori trade platform in this region.
I am looking to co-host with Australia’s Minister Kern Wyatt a trade delegation to South East Asia which officials are working on for early next year.
As we know the Māori economy has grown significantly in recent decades and in the export sector is heavily concentrated in the primary export sector. With an asset base of $50 billion, Māori interests own 50% of New Zealand’s fishing quota, 30% of the sheep and beef sector and 10% of our kiwifruit orchards. The success of Māori business cannot be separated from the success of all of New Zealand. Yet, the current global context for trade is challenging for exporters, and in particular primary sector exporters, and Māori businesses heavily concentrated in this sector. We’ve all seen the increasing global trade tensions involving North America, North Asia and Europe. In the past two years alone, we’ve seen new protectionist measures affecting nearly 1 trillion dollars’ worth of global trade.
In this more challenging environment, we need a strategic and adaptable approach to trade policy.
The government’s strategy in response to the current situation is built around six key elements:
1) Defending the rules-based trading system, centred in the WTO that is so crucial to New Zealand;
2) Embedding New Zealand in the emerging regional economic architecture such as the RCEP trade agreement currently under negotiation.
3) Supporting regional and global public goods that contribute to integration and rule-making: this means being active in organisations like the OECD, APEC and the Commonwealth;
4) Advancing the concept of ‘flexible and open negotiating arrangements’ which allow other countries to join in the future if they can match the commitments of the original negotiating partners – again encouraging more rules-based integration via trade agreements;
5) Developing a Trade for All agenda in consultation with New Zealanders – With TPP, we saw a rise in anti-globalisation sentiment.
It was clear that New Zealanders want confidence that the Government is listening and that any trade deals we do are designed with all New Zealanders in mind. I see some overlap here with the work we’re doing to drive forward in response to Wai 262 – the Waitangi Tribunal Claim which encompassed protection of native flora and fauna as well as the Crown’s engagement with Māori on international agreements.
6) The final element of our strategy is intensifying our ‘Economic Diplomacy’ – providing practical support and advice to our exporters as they navigate challenges and opportunities in offshore markets. I would include some of the work we are doing on Brexit in this category. For example, government agencies have done a lot of work talking with business to try and anticipate the problems that could arise as a result of Brexit, as well as to identify any opportunities that may exist. If you think you could be affected by Brexit, I would encourage you to check the information we have provided publically on this. In particular, you should check the Brexit pages on the websites of MFAT, MPI, NZTE and Customs.
So that is our 6-point strategy in response to what we are seeing on global trade and while these are challenging times, this strategy is in place and we are as prepared as we can be.
Many of you will be aware that in December last year the Minister for Trade and Export Growth appointed the Trade for All Advisory Board to provide the Government with an independent report with recommendations on the future shape of our trade policy, taking into consideration the public’s views expressed during consultation. We are expecting their report at the end of October.
Māori have been clear in their expectations of our trade policy and have asked that the rights of indigenous peoples are addressed - as well that the protection of our taonga and mātauranga as outlined in Wai 262 also be reflected. So I want to provide some line of sight to the work that I am leading in that area.
As you know the Wai 262 claim was lodged in 1991 and is one of the largest and most complex in the history of the Waitangi Tribunal. I want to acknowledge the original claimants for their vision, leadership and foresight.
Wai 262 considered who is entitled to make or participate in decisions affecting indigenous flora and fauna, the environment, Māori culture and taonga associated with of Māori culture.
It was also the Tribunal’s first ‘whole-of-government’ inquiry – examining the policy areas of more than 20 government departments and agencies.
The tribunal report Ko Aotearoa Tēnei recommended wide-ranging reforms to laws and policies affecting Māori culture and identity and called for the Crown-Māori relationship to move beyond grievance to a new era based on partnership. However that report has sat dormant (with the exception of te reo) in trying to advance some important matters.
I believe that the time is right to advance these complex and challenging issues and the Government is now in the process of engaging with the wider community about our approach.
I have met with representatives of the original Wai 262 claimants and officials are also engaging with targeted groups.
Responding to the report requires government to provide leadership that is as courageous as it is compassionate, is principled as it is pragmatic.
For this country to thrive economically and increase our wellbeing, we need to work with Māori to better protect our taonga and indigenous knowledge - and to recognise and leverage their use in a way that supports Māori aspirations – here and abroad.
To move forward public sector agencies will need to work more collaboratively and in a more coordinated way with each other and with Māori. The proposals being consulted on are primarily centred on how the Government intends to organise itself to engage on these issue and to test the sentiment amongst Māori about what engagement would look like.
So its also useful to point out what we are doing in the whenua space to assist landowners in their current and future aspirations of developing their land. I am focussing on landowners at the beginning of their journey as there is much to be gained to increase the viability and sustainability of lands that for whatever reason remain underdeveloped and underutilised.
We have a large number of changes to the administering of Māori land ahead with the introduction of Te Ture Whenua Māori Amendment Bill currently before Parliament.
The amendments to the Ture Whenua Māori Act will simplify processes for Māori landowners. Officials are also working on potential changes to other legislation that impact on Māori land, such as rating legislation and the Public Works Act 1981.
There are over 27,000 blocks of Māori land under Te Ture Whenua Māori Act comprising 1.4million hectares or around five percent of the total land in NZ.
Māori landowners, trustees and whānau should be supported to realise their aspirations whether they be social, cultural, environmental or economic. And our relationship with the whenua is key to realising these aspirations.
We have invested $56 million over four years in the Whenua Māori Programme and have worked closely with the Ministry of Justice to advance a new approach for whenua Māori landowners.
I expect that this programme will increase the knowledge and skills for Māori landowners, increase wealth and strengthen the connection between whānau Māori and their whenua.
We are also working on improving technology to support whānau to connect, develop and invest in their whenua with initiatives such as Whenua Knowledge Hub, a Whenua Website and an update and replacement of Māori Land Court technology. During the past financial year, 61 initiatives worth just over 3.5 million dollars ($3.653m) were funded to support whenua Māori utilization.
In a nutshell our aim is to eliminate some of the onerous barriers, encourage smart collaboration and partnership, improve access to good data and information, enhance Māori Land Court process and provide access to capital funding available through the PGF.
We know that whenua Māori landowners have many aspirations, some of them relate to their economic desires, while others align more importantly to their cultural connectedness and the environmental impacts on their whenua.
In Te Tai Tokerau we are supporting three key communities - Te Kāo, Whangaroa and South Hokianga to identify opportunities and needs to achieve more value from their whenua.
We are also assisting landowners of nearly 12,000 hectares of pastoral and forest land to optimise their land and strengthen their governance capability
Te Aitanga a Māhaki Trust on the East Coast are involved in a project that represents twelve Marae spread throughout the 2,200 square kilometre Waipaoa River Catchment in Tūranga. The Trust has a roll of 6,000 beneficiaries.
In supporting this Project, Te Puni Kōkiri have been able to provide important land use information for each of these blocks. These maps enable whānau to better understand their whenua and make decisions suited to their aspirations.
Active participation of landowners in the whenua and business model builds the enterprise approach that I am seeking to embed enterprise in the way that TPK is resetting itself as contributing to Māori wellbeing and impacting sustainable outcomes for Māori.
That’s why I’m focussed on driving change through government procurement and in particular for Māori and Pacific increasing the emphasis on supplier diversity in the public sector.
Rather than basing decisions primarily on price, broader outcomes means considering the whole of life cost of goods and services and the potential benefit to business, social inclusion and the economy, whilst contributing to environmental and wellbeing also .
The revised Government Procurement Rules include an outcome to increase New Zealand businesses’ access to government procurement, including Māori and Pacific businesses.
By improving access for New Zealand businesses and Māori businesses, agencies can help grow the economy, support regional economic development and ensure that a diverse range of suppliers are benefiting from government contracts.
The Current government spend is $41 billion, so this work presents an opportunity to make a real difference in the lives of New Zealanders through the benefits realised in a more circular economy. I am also promoting this approach across the Local Government sector to double the impact.
Creating more opportunities for Māori businesses to thrive is an important part of growing New Zealand’s economy and helping to make a more inclusive and prosperous society for all New Zealanders. It is also an important part of making the Crown’s commitment to partner with Māori real and tangible.
Indigenous procurement has the potential to lift household and whānau incomes and support economic development amongst Māori enterprises through equitable access to economic opportunities.
These enterprises could in turn pass on these benefits to their communities and regions to enable innovation, wealth creation and support future generations of enterprising whānau.
Social procurement can bring substantial benefits to our communities; studies in Australia and Canada estimate that for every dollar we spend on social procurement we can deliver up to five dollars in social value.
It makes absolute sense that we are looking to use government procurement in New Zealand to deliver these wider social benefits to our communities. Interestingly we can learn much from whats happening across the ditch.
Australia for example has already implemented policies to help their indigenous communities. They have mandatory targets in place that require agencies to actively engage with indigenous suppliers.
These targets are working. In 2018 Australia awarded AUD $802 million of government contracts to indigenous suppliers, up from only AUD $6.2 million before mandatory targets were introduced.
I have recently met with Supply Nation, an intermediary organisation who support Indigenous Procurement in Australia. They recommend setting hard targets within procurement something we are considering for New Zealand.
The government procurement rules now encourage agencies to actively engage with Maori and Pacific suppliers and provide access to government contract opportunities. This is an important step forward for New Zealand and the start of our journey towards helping diverse businesses thrive.
It is important that any intermediary here reflects our communities and works for our people. Engagement with Māori Businesses is an important component of our Policy and will be part of our future design work.
My cabinet paper co-sponsored by the Minister for Economic Development on a design for social procurement in the NZ context is due to be considered at the end of this year.
T hope that you can see the potential of extending the Māori economy is a strong contender and contributor to the wellbeing approach taken by this Government and reflected in the living standards framework. After all a wellbeing approach takes a long term strategic approach to addressing the critical challenges of our time to enable a more sustainable approach to wellbeing and prosperity for our whanau, communities, hapū , iwi, tamariki and mokopuna. Nō reina tēnā koutou katoa.