Reserve Bank governor Adrian Orr has embraced Te Ao Māori and is pushing back against racism and abuse — he explains why

Friday, 16 July 2021

Reserve Bank Governor Adrian Orr says Te Ao Māori is a significant economic capital base and important for the future development of the country.

Reserve Bank governor Adrian Orr says racism may be behind some pushback the central bank has felt since it began embracing Te Ao Māori, or the Māori world, under his watch.

Orr was the first governor to be welcomed with a pōwhiri when he joined a little over three years ago and since then he has been on a mission to better link the 87-year-old hallowed institution with the multicultural country it serves.

Under his leadership, the bank has developed a Tāne Mahuta story using the Māori god of the forest to explain how it fits in the financial system, is embedding Māori language and culture throughout the organisation, is working to deepen its understanding of the Māori economy, and is rebranding to better reflect its identity and purpose.

Given 95 per cent of New Zealand’s banking assets are foreign owned, and 85 per cent are held by four large Australian banks, it is important to Orr that the central bank has a clear New Zealand identity and he says the Tāne Mahuta story strongly resonates with the country’s history and background.

Berl director and chief economist Hillmarè Schulze discusses the findings of the 2018 Māori Economy Report – Te Ōhanga Māori.

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“I really wanted a story that made it clear that when you were operating with the Reserve Bank of New Zealand, it is of New Zealand, because so much of our banking system is foreign owned,” he says.

“It can be forgotten that we aren’t here to serve foreign banks, we are here to serve the people of New Zealand.”

Orr has previously alluded to online abuse he received from “purported banking and economic experts” about the bank’s use of Māori mythology.

He says some of the pushback could indicate racism.

“I’m sure there’s components of it,” he says. “I did confront some people to say this.”

He declined to identify individuals, but noted the pushback had been from quite narrow segments of small but similar groups.

The Reserve Bank experienced a “massive pushback” when it required banks to have more skin in the game by holding more capital. The vitriol flowed almost immediately with some seeking to discredit the regulator, he says.

One of those disputes was with the right-wing think-tank The New Zealand Initiative, which criticised Orr for “likening the Reserve Bank to a Māori tree-god, something to make even the staunchest banking student’s eyes glaze over”.

The NZ Initiative has also criticised the Reserve Bank for espousing views on climate change and the Māori economy, which it says has little to do with central banking.

Alongside its role of maintaining stability in the country’s financial system, the Reserve Bank’s remit also commits it to supporting the Government’s broad economic objective to improve the wellbeing and living standards of New Zealanders through a sustainable, productive and inclusive economy.

Berl director and chief economist Hillmarè Schulze discusses the Māori asset base as detailed in The Māori Economy 2018 report.

Orr says he’s not operating outside his mandate.

“We are swimming effectively in our lane,” he says.

Having a handle on climate change is crucial to understanding risk to the financial system, he says, noting it impacts the ability to get insurance and mortgages which could leave some people excluded.

Te Ao Māori is a significant economic capital base and important for the future development of the country, he says.

“Both capital assets and human capital is very strongly Te Ao Māori and if we don’t recognise that and harness that we will be missing out on amazing opportunities not just in terms of traditional economic growth but whole new areas of innovation.”

To better understand these drivers, the bank commissioned economic consultancy Berl to continue its work measuring the Māori economy.

Berl’s latest report released this year, Te Ōhanga Māori 2018, says “the future is Māori” with significant growth in the Māori population and labour force set to continue.

The Māori population increased 30 per cent in the five years to 2018, outpacing a 7.7 per cent increase in the non-Māori population.

Where the Māori economy goes in New Zealand will help shape the prosperity of New Zealanders for decades to come, says Finance Minister Grant Robertson.

The Māori working age population, aged 15 years or over, increased 33 per cent, compared with a 9 per cent lift in the non-Māori population.

The number of Māori in employment increased 47 per cent, with a 46 per cent increase in the number of Māori employers, a 25 per cent increase in self-employed, and a 56 per cent increase in employees.

That’s ahead of non-Māori employment growth of 19 per cent, with a 4.3 per cent increase in employers, 5.3 per cent increase in self-employed and 27 per cent increase in employees.

The number of Māori under 15 years old increased 23 per cent compared with only a 1.7 per cent lift in the non-Māori population.

The make up of the Māori workforce is changing, with the number of Māori in high-skill jobs up 83 per cent in the 12 years to 2018, representing a quarter of all Māori employees. Close to half of all self-employed Māori are in high-skill jobs.

The report found the Māori asset base is diversifying away from the primary sector and the Māori economy is more and more an engine of growth in the economy.

Finance Minister Grant Robertson told a breakfast event launching the Te Ōhanga Māori report in April that it was one of the most important pieces of work that the Reserve Bank would lead during his time as minister.

“Where the Māori economy goes in New Zealand will help shape the prosperity of New Zealanders for decades and decades to come,” Robertson said.

Orr says his previous role leading the NZ Superannuation Fund has impressed on him the importance of having a long-term horizon and thinking about the economy holistically.

It is to the benefit of everyone to have an employed labour force, people who aren’t working poor, safe communities, and sustainable environments, he says.

“Our mandate is about thinking about financial stability for now and for all generations in the future,” he says. “What I’m aiming to do is actually properly achieve our mandate to its fullest extent, rather than partially achieve it.”

He says he wants to ensure the bank is relevant for all, not just for certain sectors.

One of the issues identified by Te Ōhanga Māori is the difficulties many Māori businesses face in accessing capital.

Māori have low home ownership rates which limits their ability to borrow against their homes, and borrowing against collectively owned Māori land is also fraught.

The Reserve Bank’s new logo, which it says better reflects its role as a kaitiaki, or guardian, of the financial system in Aotearoa.

The Reserve Bank noted in its May Financial Stability Report that not being able to access capital impacts the ability of Māori customers and entities to realise their full economic potential and also inhibits the growth and productivity of New Zealand’s economy.

The Reserve Bank is partnering with The Treasury to investigate the barriers and work with trading banks to improve access to capital.

Indigenous communities in other recently colonised countries face similar issues and the bank is working with its counterparts in Canada and Australia to find solutions to common problems.

Central banks around the world as well as other big global bodies like the IMF, the World Bank and the Asian Development Bank have turned their focus to issues like financial exclusion, inequality and indigenous economic failures.

While the NZ Initiative says they have jumped on “fashionable bandwagons”, Orr says it is reflecting a shift in societal attitudes.

“It is becoming a really common language,” Orr says. “And it’s not at the cost of low and stable inflation, it’s for the better of it.”

Orr says he is focused on laying down the foundational pillars for Te Ao Māori within the bank so that they will last beyond his tenure.

“It is core to the Reserve Bank being successful,” he says. “We just really need to put these pillars down.”

He notes that ideas that can seem revolutionary at the outset soon become ‘business as usual’ in the future as was the case with environmental, social and governance principles for investors.

Orr says it can make him “very sad” sometimes to see outbursts directed at the bank.

Still, he remains realistic that monetary policy is never going to win you a popularity contest and he makes sure to look after his own wellbeing, spending time away from the job hanging with his family, fishing at the beach and starting back on the golf course, albeit badly, he says.

“I don’t go home and throw stones,” he says. “I live two separate lives.”

“It’s the old adage of being able to sleep straight in bed at night, knowing that you are doing the right thing even though it doesn’t necessarily feel like the easy thing, or the popular thing.”