The Māori economy is being held back because of low homeownership rates among Māori, says Westpac acting chief executive Simon Power.
Māori businesses were growing in number, but were underrepresented within Aotearoa’s economy, and faced barriers to growth, Power said at the Apec 2021 Live virtual business summit on Wednesday.
Power presented a research report for the event from economic research firm Berl and Māori-owned business advisory OpinioNative, which concluded the Māori economy was not a distinct or separate economy, but interwoven into the wider economy.
But it identified three big hurdles that were holding Māori back from achieving their economic potential.
* The Māori Women’s Welfare League turns 70 years old and isn’t ready to retire
* New government programme to support Māori women in prison
* Budget 2021: Balancing the Budget for small and medium sized businesses
“Firstly, Māori are overrepresented in low-skilled jobs, which contributes to an income gap of around $2.6 billion between Māori and non-Māori,” Power said.
“Secondly, a lack of access to funding is stifling future growth.”
It was not just on an individual basis that was an issue, the report found.
Bi-lingual and total immersion tours in te reo will be offered at Waitomo Caves. Cave guide, Moera Anderson.
Some Māori land was not able to be used as collateral against bank lending for Māori owners. A difference between iwi aspirations and banks further restricts access to finance, the report says.
“Iwi investments tend to be over a long period, and usually include social and cultural outcomes.
“The investments are seen as part of a long-term plan; maybe 30 years or longer. Banks tend to focus on a payback period, not longer than five years, with a significant rate of investment to support the ability to pay back the loan,” the report says.
Banks and iwi worked well together on commercial operations, such as lending to an iwi-owned business, it says.
“The main misalignment comes when iwi are seeking funding for non-commercial objectives. This could be an area of further discussion to explore ways that the banking sector can work with iwi to support more future investments.”
Power said the third thing inhibiting the Māori economy was the low rate of Māori homeownership, which deprived many would-be entrepreneurs of an asset to borrow against to start their own business.
New Zealand is hosting Apec 2021, running it as a virtual event with a particular focus on how governments and big business could work with indigenous communities.
Accelerating growth in the Māori economy would help boost the rest of the New Zealand economy, Berl and OpinioNative say.
Westpac had been working to engage with more Māori and diverse businesses, said Power.
That included partnering with iwi on shared equity schemes to help more whānau into homes of their own, and supporting organisations and projects trying to drive better social outcomes, he said.
“The Māori population is young, and it’s growing fast,” Power said.
Between 2013 and 2018, the Māori labour force grew by 40 per cent, compared to 8 per cent for non-Māori, and that growth is set to continue,” Power said.
The Apec CEO Summit 2021 will be held next month.