Bank leader determined to help rangatahi build businesses

By Te Ao - Māori News

“Our rangatahi are our future,” acting Westpac chief executive Simon Power will tell a virtual CEOs forum tomorrow as part of Apec, which New Zealand is hosting via Zoom.

“They are the future of business and the future of New Zealand. Increasing the necessary support and resources available to young Māori should be a focus point.”

His speech emphasises that while the obstacles for growth in the Māori economy are diverse and complex – home ownership, barriers to education and lack of access to funding among them – they’re more than outweighed by the potential for growth.

The speech will kick off an international discussion about how to develop and work with indigenous communities to help wealth grow more equally, and ensure no group is left behind.

Power’s bank, Westpac, is using the occasion to launch a study, Mahi tahi tatou, kaha ake tatou. The Maori economy – obstacles and opportunities written by BERL and OpinioNative.

Power, a former National cabinet leader, says the Māori workforce is growing rapidly but Māori small businesses continue to be underrepresented in the wider economy.

Pivotal role

But the Māori population is growing fast and is very young. “Within the next 15 years, a very large proportion of Māori will enter the labour force and play a pivotal role in the future of New Zealand – the future is Māori.

“Between 2013 and 2018, the Māori labour force grew by 40%,” he says. “This growth will continue; in fact within the next fifteen years, an additional 30% of the Māori population will become of working age. Rangatahi will grow to be the future employees, employers, and self-employed.”

New Zealand has been built on small and medium enterprises, fuelled by employers and self-employed, driving the economy. In 2018, 99% of New Zealand business entities were either a self-employed individual, small enterprise or medium enterprise. But, as a proportion of New Zealand businesses, Māori are underrepresented.

“Māori SMEs are growing, but not fast enough,” Power says.

 Through significant growth of assets and settlements with the Crown, iwi have been able to develop diverse financial portfolios with a variety of growing assets. But, for Māori small and medium enterprises, the same significant growth has not yet occurred.

Tap into potential

“It is crucial to tap into the potential of growing Māori SMEs, and ultimately the Māori economy, through providing an enabling environment for current and future generations.

 “It is imperative that we grow Māori businesses to contribute to the wealth and wellbeing of their whanau (family) and the wider community. Fostering this growth starts with providing an enabling environment for young Māori. “

Power says with improved skills and support, the Māori economy will have higher income levels and better home ownership rates, which will in turn improve the ability for Māori enterprises to leverage financial credit options.

The report says the inability to access funding or capital severely limits the growth of small Māori businesses, and holds them back. On average, non-Māori employers earn a significantly higher income than Māori employers across New Zealand, with the exception of the unique Auckland Māori economy where Māori employers earn an income on par with non-Māori employers.

Home ownership of Māori individuals is disproportionately lower than non-Māori in 2018 across most regions in New Zealand.

Some Māori land is unable to be used as collateral to leverage financial support for Māori owners, and a misalignment between Iwi aspirations and commercial banks creates more resistance for access to finance

Covid-19 hit hard

The report also says Covid-19 has made hardship worse for Māori whose businesses were growing.

The report said Māori have always been disproportionately hit by economic shocks compared to non-Māori.

Covid made that harder.

"Māori employment numbers are high in manufacturing, construction, retail trade, and accommodation and food services, which are industries that felt the initial impact of Covid-19 hard," it says..

The pandemic has also hurt businesses.

"Many iwi were forced to make tough decisions. Ngāi Tahu were forced to close 10 of their 11 tourism businesses, while Waikato-Tainui suffered an estimated $11m in losses. This is only capturing two notable results stemming from all the challenges Covid-19 brought," the report said.

"However, it was the impact on whānau that hurt iwi the most. Covid-19 placed significant pressure on whānau, with some losing their job, while others were unable to see their whole family for prolonged periods."

The report includes examples of indigenous businesses leading the way by staying true to their values of relationship-building, shared responsibility and respect for others and the environment.