Māori businesses are growing in number but are underrepresented within Aotearoa’s economy and face barriers to growth, according to research commissioned by Westpac NZ and authored by BERL and OpinioNative.
Speaking at an APEC 2021 Live with Business event on Wednesday, hosted virtually by Westpac, Acting CEO Simon Power said the bank’s report into the Māori economy highlights several areas where Māori are being held back from achieving their economic potential.
“Firstly, Māori are overrepresented in low-skilled jobs, which contributes to an income gap of around $2.6bn between Māori and non-Māori,” Mr Power says.
“Secondly, a lack of access to funding is stifling future growth.
“And thirdly, linked to the second point, Māori home ownership rates lag well behind non-Māori, depriving would-be entrepreneurs of an asset to borrow against to start their own business.”
Mr Power said a key discussion point at APEC 2021 is how governments and big business can work with Indigenous communities here and across the region, to ensure economic growth is shared equally and no groups are left behind.
“We’re already working to connect with more Māori and diverse businesses through our supply chain, partnering with iwi on shared equity schemes to help more whanau onto the housing ladder, and using our strength as a lender to support organisations and projects that are driving better social outcomes.”
In June the bank signed Australasia’s first ever Social Loan with Aotearoa’s largest tertiary education provider, Te Pūkenga. The $125m loan will be put towards initiatives that align with specific social outcomes, such as providing better access to job training.
“The Māori population is young and it’s growing fast. Between 2013 and 2018, the Māori labour force grew by 40%, compared to 8% for non-Māori, and that growth is set to continue,” Mr Power said.
“Our rangatahi are our future. Providing them with the skills and support they need to thrive in the workforce is the first step to clearing those barriers that have traditionally held Māori back.”
Westpac NZ Head of Māori, Inclusion & Diversity Fonteyn Moses-Te Kani says the bank sees the urgency around helping Māori SMEs to get access to finance.
“We’re working together with our Iwi and Māori partners, including Waikato-Tainui, Te Whāriki o Aotearoa Trust, Māori Women’s Development Inc., Poutama Trust and Te Rūnanga o Ngāi Tahu, to look more deeply into using our collective strength to make the financial ecosystem more inclusive of these businesses,” Mrs Moses-Te Kani says.
“Today’s report includes examples of Indigenous businesses who are already leading the way by staying true to their values of relationship-building, shared responsibility and respect for others and the environment. Helping more of these businesses to succeed will have positive benefits for all of Aotearoa.”
Westpac is a Premier Partner of the APEC CEO Summit 2021, a two-day event in November aimed at improving prosperity in the Asia-Pacific through sustainable economic growth.
Editor’s note: Key report observations
The Māori economy is growing:
- The Māori economy is not a distinct or separate economy; it is interwoven into all parts of Aotearoa’s economy;
- Within the next fifteen years, a large proportion of Māori will enter the labour force, and play a pivotal role in the future of the Māori and wider economy;
- It is important to provide an enabling environment to foster the successful growth of future generations;
- Māori employers and self-employed are a fast-growing part of Aotearoa’s economy;
- SMEs in New Zealand combined with self-employed enterprises made up 99 percent of all entities in the New Zealand economy in 2018. However, Māori are still significantly underrepresented in New Zealand SMEs.
Barriers limiting the Māori economy:
- The inability to access funding or capital severely limits the growth of small Māori businesses;
- On average, non-Māori employers earn a significantly higher income than Māori employers across New Zealand;
- Home ownership of Māori individuals is disproportionately lower than non-Māori across most regions;
- 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.
Opportunities for success:
- Closing the income gap between Māori and non-Māori will result in an additional $2.6 billion into Māori households;
- Iwi and Collectives have developed significant investment portfolios and business operations which have enabled support for growth of current and future generations;
- The inspiring stories of Māori individuals have created a pathway for current and future Māori generations down different avenues of success.