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How we identified Māori authorities

Defining Māori authorities for Tatauranga Umanga Māori 2015

The Tatauranga Umanga Māori project aims to eventually identify all types of Maori businesses so we can provide data about them. Our first step was to identify Māori authorities. In this report, we consider Māori authorities to be a subset of Māori businesses.

The role of Māori authorities and subsidiaries is to receive, manage, and/or administer assets held in common ownership by Māori. Māori authority leaders are likely to be mindful of the collective relationships and responsibilities to ‘place’, and the health and wellbeing of the collective. Māori authorities include any commercial business that supports the authority’s business and social activities, and sustains or builds a Māori authority’s asset base. Ownership, control criteria, and investment models appear to be characteristics of Māori authorities.

Our definition of a Māori authority is:

  • a business with a collectively managed asset, which uses current Inland Revenue eligibility criteria to be a Māori authority (irrespective of whether the enterprise elects to be a Māori authority for tax purposes (see appendix))
  • a commercial business that supports the Māori authority’s business and social activities, and sustains or builds a Māori authority’s asset base
  • businesses that are more than 50 percent owned by a Māori authority.

Defining Māori authorities in this way:

  • uses previous research done by Statistics NZ
  • uses the Business Register grouping structures to identify businesses that support a Māori authority
  • is efficient because updates are automatic from administrative data sources, such as our Business Register.

We have attempted to address the need for Māori business statistics over the past 20 years. However, we had not published Māori business statistics until the Tatauranga Umanga Māori reports, mainly because of the difficulty in agreeing on a definition of Māori business. We are now taking an iterative approach to this process.

A 2008 project that focused on the Māori authority is the foundation for the Tatauranga Umanga Māori project.

See Tatauranga Umanga Māori – consultation document for more information on our steps to define a Māori business.

Business Register

The Business Register is a database of the individual economic units that make up New Zealand’s economy. It includes private businesses – from self-employed individuals, farms, and small stores, to large corporations. It also includes organisations such as clubs and societies, government departments, local authorities, churches, and voluntary groups. At February 2014, the Business Register had information for approximately 487,880 economically significant enterprises, up 2.5 percent from February 2013, and the locations (geographic units) where they operate. There were 973 Māori enterprises on the register.

The maintained population for the Business Register is ‘economically significant enterprises’. An enterprise is said to be economically significant if it meets one or more of the following criteria:

  • annual expenses or sales (subject to GST) of more than $30,000
  • 12-month rolling mean employee count of greater than three
  • part of a group of enterprises
  • registered for GST and involved in agriculture or forestry
  • over $40,000 of income recorded in the IR10 annual tax return.

The Business Register is the basis for all Statistics NZ business surveys. It provides the survey population from which we choose business survey samples.

Identifying Māori authorities on the Business Register

We have a Māori business indicator (MBI) in the Business Register database, which we maintain through regular monthly updating that uses Inland Revenue records for Māori authority tax codes (ie MA and MT). In 2015 we reviewed how we apply the MBI as part of an annual maintenance process. We applied an economic significance threshold and only New Zealand-based businesses were included. While this is a good starting point, we know that not all Māori authorities register under these tax codes and therefore our coverage is not complete.

Inclusion and exclusion issues

We have come across some issues within the Māori authorities we have identified. This affects the classification we are developing for this group. A permanent process for populating the Business Register will depend on having an agreed definition and a data source we can use to automatically update the population. Degree of ownership matters for the definition, as do views on whether we should include emerging Māori collectives (eg ‘by Māori, for Māori’, as Māori service providers) in the definition.

The Business Register also contains information about business group structures. These are tiered groups of businesses where the ‘parent’ has 51 percent or more ownership of a ‘child’ business, which may also have subsidiaries of its own. Currently we do not capture authorities in which a number of Māori authorities part-own a child business, but with none owning 51 percent or more. For example, when a business is owned by three iwi, each has only a 33 percent share. This is a problem we hope to solve before we produce next year’s report.

An automated process sets the MBI for ‘other enterprises’ in an enterprise group where a 'parent' enterprise is flagged as Māori-owned – but this process only works downwards and for ownership relationships of more than 50 percent. Our staff can set the MBI manually where a business is not flagged as being Māori-owned by Inland Revenue. However, manually flagging businesses is a subjective process and not guided by clearly stated rules or definitions.

For the Tatauranga Umanga Māori project, if a Māori authority is identified as part of a group then all businesses linked below it are automatically included in the data (see figure 14 for examples of business group and identification as a Māori authority).

Figure 14

Identifying a Māori business within a business group

Limitations of the tax-code approach

Voluntary identification

Relying on tax codes to identify Māori authorities does have shortcomings. Although a Māori authority is eligible to use the Māori authority (MA) or Māori trust (MT) tax codes, they may choose not to. This creates problems in automatically identifying Māori authorities in the Business Register. To address this, we have used lists from existing research reports to help identify businesses. However, gaining lists of Māori authorities and their support businesses directly from partners will increase the number of businesses we can collect information from. Information sources used to identify Māori authorities need to be regularly maintained, so updating needs to be completed using automated links.

Business structure and ownership

The criteria used for grouping businesses together in the Business Register also present us with issues to address. Māori authorities identified in the lower tiers of a business group (figure 10b) will be identified as Māori authorities, but those higher in the group (enterprises A and B) or in a different branch (enterprise C) will not. At present, we need to manually check information to determine if the other businesses in the group are Māori authorities.

Joint ventures are not listed under business groups because the ownership structure is a 50/50 split, not a majority shareholding. The advantage of being part of a business group is lost in these cases and requires manual identification. Information from our partners will prove crucial for successful identification.

The limitations of the approach we’ve taken so far in Tatauranga Umanga Māori highlight that partner feedback will help identify Māori authorities, and help develop further stages of this project. They also highlight that identifying Māori businesses is no simple matter.

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