Proposed amendments to the Māori Trustee Act 1953 are set out in the Māori Trustee and Māori Development Amendment Bill 2007.

Māori Trustee organisational amendments

Amendments to the Māori Trustee Act 1953 represent a new starting point for the Māori Trustee:

• The Māori Trustee will be established as a stand alone organisation, separate from Te Puni Kōkiri, with accountability requirements for public funding.
• The Minister of Māori Affairs will appoint the Māori Trustee (at present the Māori Trustee is an office conferred on an employee of Te Puni Kōkiri).
• The Māori Trustee will employ the Trustee’s own staff.
• The Māori Trustee will pay interest received on funds held in trust in the Common Fund, less a management fee.The Māori Trustee will regularly review interest paid taking into account appropriate market rates.

Consultation hui on these proposals were held in August and September 2007. They received widespread support, provided the new arrangements are adequately funded.

Questions and answers on the new organisational amendments for the Māori Trustee.

What are the proposed new arrangements?

The Government is proposing that the Māori Trustee be set up as a stand-alone organisation, separate from Te Puni Kōkiri.

A funding agreement will be reached between the Māori Trustee and the Crown through the usual processes. The Māori Trustee will be required to report annually to Parliament on the specified outcomes and how the public funding has been spent.

What issues were raised during consultation?

During August and September 2007, eleven consultation hui were held and approximately 2,000 people attended. Written submissions were also received.

There was widespread support for the proposals to establish the Māori Trustee as a stand-alone organisation, with clear accountability requirements. This support was on the basis that Crown funding would enable the Māori Trustee to be a viable and sustainable stand-alone entity. Participants suggested that beneficial owners should have a say in the appointment of the Māori Trustee.  Participants were encouraged to put forward suggestions as to how they considered this could be best managed.

The consultation also promoted a wider discussion about the potential for the Māori Trustee to take a leadership role in promoting and facilitating Māori development. This feedback had a direct impact on work that was also proceeding, looking at ways of more effectively supporting Māori development. See information relating to Māori Business Aotearoa New Zealand (MBANZ). 

What are the current reporting arrangements for public funding?

Te Puni Kōkiri receives funding to provide services to the Māori Trustee. Te Puni Kōkiri reports to Parliament.

At present, the Māori Trustee is not obliged to report annually to Parliament, although in practice the Māori Trustee has done so on a voluntary basis for a number of years.

How will the Māori Trustee be appointed?

The person holding the office of Māori Trustee will be appointed by the Minister of Māori Affairs for a term of up to 5 years. This appointment will be able to be renewed. At present, the Māori Trustee is an office conferred on an employee of Te Puni Kōkiri.

The Maōri Trustee will continue to be independent in undertaking his or her trustee and agency responsibilities. The Bill explicitly recognises this independence.

The reasons for removing the Māori Trustee from office are set out in the Bill - because of disability affecting the performance of duty; bankruptcy; neglect of duty; or misconduct.

The Māori Trustee will be able to appoint a Deputy Māori Trustee.

Why will the Māori Trustee be included on the 4th Schedule of the Public Finance Act 1989?

Including the Māori Trustee on the 4th Schedule of the Public Finance Act 1989 will mean that certain provisions in the Crown Entities Act 2004 (about reporting and the provision of information) will apply to the Māori Trustee. This option is being proposed because:

• the purpose of the 4th Schedule is to provide a framework for organisations that are independent of the Crown while being accountable for public funding
• the arrangements applying to the Māori Trustee will be seen to be consistent with arrangements applying to other organisations receiving public funding, and
• the arrangements applying to the Māori Trustee will be updated to reflect good practice over time, where appropriate, as part of this wider framework.

Questions and answers on proposed amendments to the way in which interest is determined

Why are changes being proposed?

Over the years (particularly during periods of high inflation) a significant gap has sometimes developed between the interest rates paid by the Māori Trustee on money held in trust in the Common Fund and other relevant market rates.

The Government wants to make sure that interest paid on money held in trust in the Common Fund take into account other appropriate market rates.

How are interest rates currently set?

The interest rates are currently set out in the Māori Trust Office Regulations 1954.They were last adjusted in 1992.

There is currently no explicit requirement to review the interest rates.

What are the current interest rates?

Money held in trust in the Common Fund to the credit of a particular account is currently paid interest at the following rates:

• 3% for amounts less than $5,000
• 4% for amounts more than $5,000and less than $50,000, and
• 5% for amounts $50,000 and over.

Interest is not paid on amounts held on demand or on amounts less than $20.

What changes to the setting of interest rates are being proposed?

The Māori Trustee Act 1953 will be amended to require the Māori Trustee to pay the interest received on money held in trust in the Common Fund, less a management fee. The Māori Trustee will also be required to regularly review interest paid taking into account appropriate market rates.

The Māori Trustee is not a commercial trading bank and does not operate as one. Therefore when looking at which market interest rates it is appropriate to take into account, the Māori Trustee will be able to look at funds that are comparable in size and subject to comparable conditions, for example the low level of risk for money held in trust in the Common Fund.

The proposed changes will allow the Māori Trustee to make deductions for a management fee from the interest to be paid.

Māori Business Aotearoa New Zealand (MBANZ)

The Māori Trustee Act 1953 will be amended to establish a new independent statutory corporation to further Māori economic development:

• A new, independent, statutory corporation will be set up to further Māori economic development by utilising the potential of resources available to Māori. The working name of the corporation is Māori Business Aotearoa New Zealand or MBANZ.
• The corporation will be responsible for a new fund. This will include a significant contribution from the Government, a contribution of $35 million from the General Purposes Fund and potentially contributions from other organisations. The General Purposes Fund is owned by the Maori Trustee.
• Funds held in trust by the Māori Trustee, unclaimed money and other funds owned by beneficial owners are not being transferred to the new corporation.
• The corporation will be governed by a Board, which will be chaired by the Māori Trustee.
• The other Board members will be appointed by the Minister of Māori Affairs and the Minister of Finance. Board members must not represent the interests of any particular organisation, business, or political party.
• The Bill includes checks to make sure that the Māori Trustee and other Board members declare interests and stand aside from decisions when appropriate. This helps to address potential conflicts of interest and to maintain the Māori Trustee’s independence as a trustee and agent.
• The Bill sets out other accountabilities such as reporting requirements and the holding of a yearly public meeting.
• The title of the Māori Trustee Act will be changed to the Māori Trustee and Māori Development Act to better reflect the proposed changes.

Questions and answers on the proposed amendments to establish a new statutory corporation

What changes are being proposed?

The Māori Trustee and Māori Development Amendment Bill will :

• Set up a new independent statutory corporation to further Māori economic development by building on Māori resources. The working name of the corporation is Māori Business Aotearoa New Zealand or MBANZ
• Set up a new fund to enable the corporation to carry out its work, and
• Amend the title of the Māori Trustee Act  to “Māori Trustee and Māori Development Act” to reflect the proposed changes.

What will the new statutory corporation do?

The principal function of the corporation will be to further the economic development of Māori by using the potential of Māori resources. This will have benefits for Māori development in general.

In order to fulfil this principal function, the corporation will over time build the capacity to be able to:

1. provide business advisory and mentoring services for Māori businesses;
2. identify opportunities with a significant potential for Māori economic development;
3. assist Māori to start, consolidate and develop successful Māori businesses;
4. provide networking and sector development services;
5. carry out work to ensure that its services continue to meet the needs of Māori businesses; and
6. provide other services it identifies as being likely to contribute to its principal function.

Who will run the new statutory corporation?

A governing Board will be appointed by the Minister of Māori Affairs and the Minister of Finance.  The Māori Trustee will be the Chair.

Board members will be appointed to carry out the functions of MBANZ and must not represent the interests of any particular organisation, business, or political party.

Where will the money for the new fund come from?

Funds held in trust by the Māori Trustee, unclaimed money and other funds owned by beneficial owners are not being transferred to the new corporation.

The new MBANZ fund will include:

• $35 million transferred from the General Purposes Fund (GPF) administered by the Māori Trustee (see below);
• a similar contribution from Government;
• potentially contributions from other organisations.

The GPF is owned and administered by the Māori Trustee and can already be used for development purposes. The money transferred from the GPF to the new, independent, statutory corporation, chaired by the Māori Trustee, will still be used for the benefit of Māori.

Combining $35 million from the GPF with a significant Government contribution, and potentially other funding, will create a bigger pūtea. This will enable the funding to be more actively used to accelerate Māori development.

How will the new corporation be accountable for the fund?

The new corporation will be accountable to both Māori and the Government through a range of measures. The corporation will:

• have its functions set out in legislation
• be included on Schedule 2 of the Public Audit Act 2001
• be required to prepare a plan with a strategic vision and performance indicators
• be required to report annually on its performance against the plan
• be required to hold a public meeting each year
• be required to provide information about the operations and performance of the corporation at the request of the Minister of Finance and the Minister of Māori Affairs, and
• be required to commission an independent review every five years.

How will the new corporation fit in with the services provided by the Ministry of Economic Development and New Zealand Trade and Enterprise?

The functions of the new corporation will complement those of New Zealand Trade and Enterprise and the Ministry of Economic Development and it is anticipated that very productive working relationships will develop. Te Puni Kōkiri will work to ensure alignment of services.

What will this mean for Māori?

The new independent corporation will be well positioned to identify how to make the most of opportunities for Māori in business and to build on Māori resources to promote Māori economic development.

When will the new corporation begin operations?

After the Bill has been passed, it will take some months to establish the new corporation, and to set up all the systems and processes for it to run successfully. In the meantime, additional information will be published on the Te Puni Kōkiri website.

Last modified: 17/04/2008