The Implications of a Recession for the Māori Economy

Māori Asset Base5

Summary: In 2005/06, total Māori-owned commercial assets were estimated to be worth $16.5 billion, 52% of which were invested in primary industries, 8% in secondary industries, and 40% in the tertiary industries.

Background

  1. Total Māori-owned commercial assets were estimated to be worth $16.5 billion in 2005/06, an increase of $7.5 billion or 83% since 2001. In 2005/06, 52% of Māori commercial assets were estimated to be invested in primary industries, 8% in secondary industries, and 40% in the tertiary industries. This contrasts with the total economy which invests 10% in primary, 9% in secondary and 80% in tertiary.
  2. In 2005/06, Māori commercial assets amounted to 1.5% of the reported value of the total New Zealand business sector, an increase from 1.2% in 2001. The largest percentage increase in Māori commercial assets between 2001 and 2005/06 was in Māori Trustee land assets, which increased by 310%. This increase is partly due to general dairy and grazing and price increases.
  3. The largest dollar value increase during this time has been in Māori businesses, which increased by $4.8 billion, or 83%. This increase is partly due to greater numbers of Māori employers and Māori self-employed.

 

5 The Māori Asset Base, Te Puni Kōkiri, February 2008

Risks

  1. The key risk to the Māori asset base is that its value is expected to decline in the short term due to a combination of factors:
    • The presence of the majority of Māori assets in the primary and secondary sectors means that they are exposed to global fluctuations in demand and commodity prices;
    • It is expected that the boom in the dairy sector will slow which will impact on the value of Māori land assets; and
    • Māori businesses, as owners of Māori assets, are expected to be impacted by the recession as described below.

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