Inequality depriving Māori and the economy of $2.6b every year

Thursday, 29 March 2018

What New Zealand would look like if equity for Māori was achieved right now.

Inequalities in education, employment and income for Māori are costing the New Zealand economy $2.6 billion a year - and, if the issue isn't fixed it will increase every year to reach $4.3 billion by 2040.

Change Agenda: Income Equity for Māori is a joint report from Business and Economic Research Ltd (BERL), Ngāi Tahu iwi and the Māori Futures Collective. The report released on Thursday is described by the authors as a call to action. It puts a dollar value on inequality and how it creates an economic loss for Māori, but it also puts a figure on the economic benefits of Māori success to the nation.

'The current inequalities for Māori create significant social and economic harms for our communities and whānau,' says Dr Eruera Tarena from the Māori Futures Collective.

'If we choose to allow those inequalities to grow then social and economic harm will be felt by everybody because it will get to a scale where everyone will feel that pain.'

$2.6 billion is the potential income Māori could be taking home every year if they earned the average New Zealand income. But at every age level, Māori receive a much lower income.

A report, co-written by Eruera Tarena, paints a bleak picture for the economy in twenty years if Māori inequality isn't addressed.

* Editorial: Government sends mixed messages to Māori

* Officials: Housing causes 'stark' inequality between young and old**

It equates to taking home $140 less per week, per person for the current working Māori population. Māori workers aged between 40 and 59 are taking home $200 less a week.

INEQUALITY - THE NUMBERS

- Income gap for Māori is $2.6b per year - $600m more than total Treaty claims payments

- $140 less income per week for working Māori

- $200 less income per week for working Māori aged 40 - 59

- One third of the Māori working population have no qualifications

Māori workers are taking home $140 less per week than the average New Zealand income.

- 16 per cent of Māori hold an advanced qualification compared to 30 per cent of the country's workforce

- In 2038, Māori will make up one fifth of New Zealand's working age population

'The income difference is a byproduct of a system that doesn't work for Māori,' says Tarena.

One-third of the Māori working population have no qualifications. Only 16 per cent of Māori hold an advanced qualification compared to 30 per cent of the country's work force.

'This isn't just a social issue. Māori success is an economic issue. It is absolutely about social justice and fair treatment and opportunities for all. But we've got to look at how Māori success would positively influence and impact the nation and business.'

Māori are working the same hours as the New Zealand average, but one third of the working Māori population have no qualifications and over half have lower skilled jobs. So, Māori are losing income potential because they are in lower paying jobs.

'These disparities aren't caused by laziness, we work really hard, we work more. The issue is where. Our efforts are expended and our profile in the workforce is low skilled, low qualifications and that's what we have to turn around,' Tarena says,

The report estimates if inequalities in education and employment for Māori aren't addressed now, the current income gap for Māori will increase from $2.6 billion per year to $4.3 billion in 2040.

Based on the current working Māori population, almost half the jobs are at risk of being replaced by automation.

'Continuing to do what we've always done is going to lead us into a very deep dark hole,' says BERL Chief Economist Ganesh Nana.

Inequality for Māori doesn't surprise Dr Ganesh Nana, the chief economist from BERL, but he was surprised by the figures in the report.

'Continuing to do what we've always done is going to lead us into a very deep dark hole,' says Nana.

'It's not a nice scenario for Māori and for New Zealand. The opportunity is in front of us to turn things around in terms of providing equality of opportunity and equality in education. So we can see Māori earn and contribute to the economy in a lot more advanced and productive way.'

Forty-three per cent of Māori are concentrated in two sectors: office and administration, and manufacturing and production. The wages are lower on average and those jobs are at risk of disappearing over time through automation.

Only 8 per cent of Year 11 Māori students in 2009 went on to graduate with a bachelor's degree.

'The clear recognition at the moment is that the systems and the policies we have in place at the moment are not delivering equal outcomes. Māori outcomes are significantly less than those of the rest of the population. If we make those outcomes a lot more equal we all benefit - not just Māori but the rest of New Zealand.'

Nana says a barrier to reducing the income gap is qualifications. One third of the Māori working population have no qualifications. Only 16 per cent of Māori hold an advanced qualification, compared to 30 per cent of the country's workforce.

'Māori potential and Māori success is actually critical to the collective prosperity of the nation and in particular of aging Pākehā baby boomers,' says Eruera Tarena. Pictured is Max Tiweka of Ariki Creative.

'We're going to have to look at how we connect rangatahi to the jobs of our future. So they're realising their potential but also adding to and enhancing the productivity of the nation,' says Tarena.

'This isn't something a scholarship can fix, no amount of scholarships can fix. A short term fix is not going to fix the scale and pace that's needed.'

What concerns the authors of the report the most is the country's changing population. Currently more than 40 per cent of Māori are under 20 years old compared to less than 30 per cent of the overall national population.

'It ties together the two disparate groups of New Zealand society, the young, fast-growing emerging brown population and an aging Pākehā population. The demographic change is going to need to be counted by supporting young, brown skilled talented people into the workforce,' says Tarena.

'Ngāi Tahu are committed to working with Government and all partners to eliminate the systemic inequalities that Māori face,' says Lisa Tumahai.

'Māori potential and Māori success is actually critical to the collective prosperity of the nation and in particular of aging Pākehā baby boomers.'

Māori make up 13 per cent of the current New Zealand labour force. But Stats NZ estimates the Māori labour force will double to make up one-fifth of New Zealand's working age population by 2038.

'The thing New Zealanders in general need to comprehend and grasp is the growth in the workforce is increasingly becoming dominated by young Māori especially if you're talking about provincial areas in New Zealand,' Nana says.

'And so if we continue to pretend these education outcomes and this income gap is somebody else's problem then we're fooling ourselves because it is actually New Zealand that's losing out, not just Māori.'

Ngāi Tahu iwi and the Māori Futures Collective says it's not just Māori or the Government that needs to lead change and address the issues of inequality.

Over the past 20 years the tribe has grown it's $170m treaty settlement into a multi-billion dollar enterprise. Tarena says the solid asset base has now given the iwi confidence to scale up their social responsiveness to not only their own tribal members but also Māori in general.

Dr Eruera Tarena says the solid asset base built up by Ngāi Tahu has now given the iwi confidence to scale up their social responsiveness to not only their own tribal members but also Māori in general.

'Maintaining the status quo is no longer viable for both Treaty partners and we have both a moral and economic imperative to act,' says Te Rūnanga o Ngāi Tahu Board chairwoman Lisa Tumahai.

Māori earn $2b less as a group and, if nothing changes, it will double to $4b a year. But an ageing population will be relying on Māori in 10 years so there's concern there'll be a negative rippling effect on the economy.

'Ngāi Tahu are committed to working with Government and all partners to eliminate the systemic inequalities that Māori face. We are committed to creating a vibrant and equitable future where Māori success will benefit all New Zealanders.'

Total Waitangi Treaty claim payments to date are $2.2b over the last 20 years. The income gap for Māori because of inequality is $2.8b every year.

Tarena says committing to Māori success is an issue of national importance.

He's challenging everyone including iwi and the Government to commit to a systems change.

'Social transformation and change is complex, there is no simple easy solutions. What the report shows is that we've been skirting around that complexity and it hasn't really improved.

'The scale of the issue means we're going to have to be collaborative, innovative and invest in change. We need to build a cross-sector movement around equity, around Māori potential.

'Our challenge will be how do we connect that across different sectors. How do we connect that with Pākehā that Pākehā understand this isn't something you can roll your eyes at or ignore.

Ariki Creative owner operator Hori Mataki says: 'Any job can really be a Māori job it's just how we approach it.'

'We have a largely monocultural work environment. Business will gain a competitive advantage if they're more culturally diverse. They will be more prosperous working with young Māori and growing that talent in a work environment where culture is welcomed, where you don't have to leave your culture at the door.

'It's key to tapping into the future of a diverse multicultural workforce.'

Hori Mataki, 34, describes himself as a design creative. He started his company, Ariki Creative in 2007. Now, the business employs 12 staff based in Christchurch.

'I used to love playing games. So I wanted to make them for a job. But it turned out it's too hard to make games. So I chose another route. I was good at drawing, so I thought if I could draw for a job I'd be sweet. Just draw every day. It all started from that.'

Mataki has a Bachelor of Design he earned at the Christchurch Polytechnic Institute of Technology. He says the first three years was a learning curve: 'The business stuff I learnt off the internet, YouTube.'

His business focuses on professional brand communication, brand strategies and digital communication and he's unapologetic about their work being distinctively Māori in design.

'My ancestors used to carve houses and do a lot of things in terms of their design and art to give mana to things that were important to them. We've just taken that same philosophy and applied it to our business. We want to carve your identity into your design logo and tell the stories our ancestors told in the same areas.'

He says the Change Agenda: Income Equity for Māori report has highlighted for him stereotypes people believe Māori can only occupy low paying, low qualification jobs.

'It's just perceptions, part of stereotypes we face day-to-day. Where our language fits, where our culture fits. If we truly think in Te Āo Māori we fit everywhere, we fit everything.

'It's about belief of what we fit. I was told all the time I shouldn't start a business it's too hard or why are you doing design? What is that? It just didn't fit what people's perceptions were. So I just love the space. I just wonder why people would think Māori wouldn't fit into these things you know.

'Any job can really be a Māori job - it's just how we approach it.'

The report highlights the shift towards innovation, technology and robotics that will favour highly skilled workers but displace low-skilled labour, heavily-occupied by Māori.

'What the report shows is really the threat of these inequalities are setting Māori up to take a bit of a hammering in the future. If we're not careful we're going to follow that same old historical pattern,' says Tarena.

'If we choose to let this happen it will have a significant impact on whanau, communities and the economy.

'Everyone will feel that pain. So everyone has a shared interest in turning those outcomes around. The key thing is we have to act now and put the foot on the accelerator, we can't be looking at this in 10 to 15 years time.

'We're going to have to connect rangatahi to the jobs of our future. So, they're not only realising their potential but also adding to and enhancing the productivity of the nation.'

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