“Bailouts, Bad Ventures halve Treelord cash”, so screamed the sensationalist headline in yesterday’s Waikato Times, conjuring up images of another Māori Iwi without the requisite financial ability squandering away taxpayer dollars. This was the article that greeted me this morning when I began my peruse of the daily news, and the opening paragraphs left me shaking my head in disgust with yet another Iwi who had apparently mis-managed their settlement funds.
A central North Island iwi has lost a reported $29 million on bad investments and bailouts, and wiped almost half the value off its $66m Treaty settlement.
A forensic audit was commissioned and a special general meeting was held this month to alert beneficiaries to the multimillion-dollar loss, which sources inside the tribe said took the cash asset from $66m to $37m.
What on earth was going on? How does an Iwi lose $29 million dollars in one year? The answer is deceptively simple, they have not.
I say the answer is deceptively simple, but the truth is that the Waikato Times have deliberately misrepresented the financial position of the Tūwharetoa Settlement Trust and went to some lengths to fudge the issue. No doubt the Times article was written to evoke a visceral, anti-Māori sentiment amongst its readers. Reading the comments (Never read the comments!) that follow the article on the Stuff website, demonstrates just how successfully the Times managed to portray another Iwi as economically incompetent.
So who lined their own nests. Smells very fishy here – plenty of crooks and incompetent people involved and no doubt paying themselves handsomely.Why breakfast in schools when there is plenty of money for the tribe to look after their own. If a substantial sum has been put into education, then what kind education? If it is for schools then apart from what the Ministry of Education gives, then the schools have done well.
Another particularly enlightened comment followed:
My first thought is ‘what Muppets they are to loss that much cash!’; then, upon a split-second of further reflection, my thoughts are that, actually the New Zealand public are the Muppets for being so apathetic about the iwi grievance industry and the subsequent sterilisation of huge chunks of the wider public’s financial resources that are associated with this false nationalised guilt trip!
These negative comments are the direct result of the gross incompetent reporting of a daily newspaper in one of our largest regions. On a day where the nation’s outrage was directed at a series of racist cartoons in the Marlborough and Christchurch daily papers, we are entitled to be asking some hard questions about the standard of reporting on Māori issues in the mainstream media.
The True Financial Position
What then is really going on within Tūwharetoa? The Settlement Trust is being remarkably open about their financial dealings, and all of this information was sourced from the Trust’s website (tst.maori.nz)
The Trust has not lost $29m as the article claims. There has been a loss on investments of approximately $5m during the 2012-2013 financial year and the Trust recognises that there is work to be done in that regard. While substantial, $5m is not as sensational a loss as the $29m claim by the Times.
So, where has the other money gone?
In accordance with the Deed of Settlement, and under the Tūwharetoa Settlement Trust Deed, the Trust is required to transfer a portion of the $66m settlement to four Forest Hapū Cluster Trusts within the rohe. These transfers took place in late 2012, and amounted to a sum of $16.2 million. This does not represent money that has been lost in bailouts or bad ventures. It is a distribution of the Central North Island Forestry Collective settlement from Tūwharetoa to clusters of hapū within Tūwharetoa. The Settlement Trust itself will experience a write down in their balance sheet position, from the $65m recorded in its 2012 Financial Report to an expected $37m in their yet-to-be-released 2013 Financial Report. At the same time, the Forest Hapū Cluster Trusts – Trusts representative of the numerous Hapū within Tūwharetoa – will collectively receive assets worth $16.2m.
A further $12m has been distributed over the last few years for various community and social initiatives in the rohe.
The large fall in the cash and asset position of the Tūwharetoa Settlement Trust is, on its face, rather alarming. When you dig a little deeper into their financial accounts, and publically available information, it is clear to see that this is not an example of financial mismanagement as stated by the Waikato Times. Yes, the Trust has “halved”* the amount of cash they received from the settlement but this did not arise from bailouts or bad ventures. The bailouts mentioned in the article relate to transactions in 2008 and have no effect on the current write down (Net assets at 31 March 2012 amounted to $65m, approximately equal to the $66m settlement received in 2008). The fall in the asset base arises primarily from the distributions made by the Trust.
Yes, the Trust still has some work to do it improve its investment returns, and a review of its investment risk profile would be a good start. $5m of “impairments” on investments is not a good result considering the massive growth in equity prices over the past two years. As an outsider, and without seeing their 2013 Financial Accounts, it is difficult to comment more directly on that issue, but let’s have that debate, not the sensationalist, race-baiting rubbish that has come out of our daily papers these past few days.
*The author of the Waikato Times article’s mathematics, much like his financial competency, is rather dicey. A write-down from $66m to $37m represents a 44% decline, a figure still some way short of half.