Invoking the relativity clause

The Treaty settlement process is moving along nicely under Chris Finlayson (and was moving well under Michael Cullen too). The total value of all Treaty settlements to date exceeds $1 billion – or by my estimation at least. This is hardly a revelation, but consider this:

As part of their settlement agreements Ngai Tahu and Tainui have a relativity clause. A relativity clause is a “special top up mechanism” designed to ensure Ngai Tahu and Tainui maintain their high position relative to other Iwi. The relativity clause comes into effect when the sum total of treaty settlements exceeds $1 billion in 1994 dollars (the clause has effect from 1994 to 2044).

Unfortunately, I can’t find the text for the full Ngai Tahu and Tainui settlement agreements, but it is my understanding that Ngai Tahu and Tainui can invoke the relativity clause and that gives them the right to return to the negotiating table. I believe they can only negotiate a top up cash payment as opposed to the return of more land, management agreements or anything else.

An extra payout will have interesting political consequences. Many New Zealanders will be baffled that the already rich, and that is a subjective term, Ngai Tahu and Tainui can double dip. Non-Maori New Zealanders will ask aren’t settlements meant to be full and final. What I’m getting at is that a redneck backlash will occur. Maoris this Maoris that sort of stuff. The sort of stuff that will give the Tories, and the Labour Party too, the shivers.

No government wants to be perceived to be pandering to Maori. As a result the government has engaged in some creative accounting in an effort to avoid exceeding $1 billion and, consequently, avoid reopening a political can of worms. However, the government, no matter how they twist it, cannot avoid exceeding the very low threshold that is $1 billion – especially with the looming and large Nga Puhi and Tuhoe settlements.

I hope the Ngai Tahu and Tainui return to the negotiating table soon. Both Iwi accepted paltry sums ($170m), then again they couldn’t be expected to squeeze out much more in the circumstances. Hopefully a top up payment gives the two Iwi the financial power they need to form the buying consortium that Tuku Morgan is pushing. Tuku is looking to form a sort of Maori conglomerate in response to assets sales. The plan is that Iwi will combine their purchasing power in an effort to acquire sizable chunks of New Zealand’s strategic resources. I must admit, this is one of Tuku’s better ideas (not saying I agree with asset sales because I don’t). Ngai Tahu will also need a cash injection if they want to play a lead role as a private investor in the Christchurch rebuild.

The rise and rise of Iwi is inevitable. Tainui and Ngai Tahu are already the economic powerhouses of their regions (Waikato and the South Island respectively) it is only a matter of time before Iwi like Nga Puhi, Tuhoe and Ngati Porou become the driving forces behind their regional economies. Makes you wonder when all Maori will benefit from the strength of Iwi.