Photo: RNZ, Angus Dreaver.
It’s an accepted fact that the Māori economy is booming. That brings with it the pressing question of why whānau are still struggling, writes Sacha McMeeking.
I was listening to Jack Tame interview Professor Margaret Mutu recently, admiring her grace under pressure, when I had a small PTSD moment.
Jack asked Margaret a question that will sound familiar to many people working in Māori development: If the Māori economy is now large and growing rapidly, when will it start solving the disadvantage experienced in many Māori households?
On the surface it seems like a fair question. But I found it jarring. It’s laden with expectation — that because Māori now have wealth (again), we should have cured inequality.
The between-the-lines rub is that we’re landed with solving challenges we didn’t create. The scale of the problems caused by colonisation utterly dwarfs our collective iwi balance sheets, and quite a lot of gaslighting goes on to deny that imbalance.
But let’s, for a moment, accept that the question is sometimes genuine. It’s a serious one for our community to engage with because it pulls into sharp relief deeper questions that matter to us. What are the responsibilities of the iwi to its members? What is, or ought to be, the purpose of Māori economic activity? And so on.
Those questions aren’t easy to answer, but there are some insights from economics, and a sprinkling of maths and social science that can help us explore what we might find fair and reasonable.
The starting point is the body of research on what economists call intergenerational mobility. In simple terms, this research asks: “If a family begins in the lower income brackets, how long does it typically take for their descendants to reach average income?”
The answer, almost everywhere, is that it takes a long time — more time than seems reasonable. (Spoiler alert: it pretty much looks like the intergenerational patterns of disadvantage we’re more than familiar with in Aotearoa).
One of the best-known ways of visualising this is called the Great Gatsby Curve. It shows that in societies where inequality is higher, economic advantage and disadvantage tend to persist across generations. Children often end up in roughly the same economic position as their parents.
Researchers at the OECD studied this across developed countries Not surprisingly, the results resemble a league table. Nordic states get a podium finish. In these countries, a child born into the bottom 10 percent of incomes can expect their family to reach average income within two to three generations.
To underscore that insight, the best-case scenario for trickle-down economic approaches to whānau moving from poverty into the middle-income bracket is two generations. It takes time to accumulate education, employment, and asset ownership within families.
But New Zealand fares worse than that. We don’t even get a podium position. We sit at the bottom of the middle performers. Our national best-case scenario appears to be roughly three to four generations.
So the first answer to the question of “Why haven’t we solved whānau inequality yet?” is that western science tells us that meaningful and durable outcomes could take three or more generations to appear.
There’s also a “but wait, there’s more” fine-print section to our situation, because Māori are also recovering from imposed forces that have compounded the loss of our wealth.
The first is the colonial practice of asset-stripping. As we know, over the 19th and 20th centuries, Māori communities experienced large-scale land confiscation and forced sales, exclusion from capital markets, and the dismantling of economic institutions that had previously supported tribal prosperity. The consequences were not simply lower incomes in the moment. In effect, the glue that enables wealth accumulation was stripped away.
Most models of intergenerational mobility assume families begin within the same economic system and retain at least some continuity of assets. In the Māori case, the starting point was fundamentally altered. That means the climb back is likely to be longer and steeper than the standard models anticipate.
Meanwhile, a second, more encouraging, feature is the Māori economy. Over the past few decades, iwi and Māori organisations have rebuilt a substantial economic base. Estimates now place the Māori economy at well over $100 billion and continuing to grow. Given the starting point only a few generations ago, this is an extraordinary achievement.
However, the structure and purpose of our economic institutions caution against jubilant optimism. Much of the Māori asset base sits within collective institutions like iwi authorities, trusts, incorporations, and post-settlement governance entities. These organisations are typically designed to steward assets over long horizons. Their focus is on rebuilding capital, strengthening resilience, and generating benefits that endure across generations.
That approach usually means profits are reinvested rather than widely distributed. Resources are directed into expanding the asset base, supporting education, housing, cultural revitalisation, and other collective priorities.
From a governance perspective, that is prudent and responsible. But it also means that the pathway from collective wealth to household income is indirect. Only the dividend stream, not the full asset base, is actually directed toward addressing the factors that enable household economic mobility.
For most households, economic security is shaped primarily by wages, employment stability, and access to housing. For most, any dividends flowing out of collective investment portfolios will have a marginal effect. More to the point, most whānau are more likely to be able to access a “capability programme” than an actual dividend.
Taken together, these factors help explain why the idea that the Māori economy will solve Māori disadvantage is not, in my view, a reasonable expectation.
What is perhaps a reasonable expectation is that our economic institutions start to address these tensions with a greater sense of urgency and determined creativity. If we rely solely on a simple trickle-down model — by building, for example, large commercial portfolios and then assuming household wellbeing will automatically follow — the impact on household mobility is likely to be limited. We can expect to wait three or four generations before we see a shift in the lived realities of whānau experiencing poverty.
But research suggests we can accelerate change by focusing on two critical determinants of economic mobility: housing and labour market participation.
Housing is the single largest driver of wealth accumulation for most families. Home ownership provides stability, access to appreciating assets, and often the collateral that allows people to invest in education, business, or other opportunities. Housing also shapes neighbourhood environments, schooling options, and the overall stability of family life.
Then, secure employment, access to skilled occupations, and opportunities for advancement are the primary mechanisms through which households build income over time.
If Māori economic development strengthens these determinants — supporting access to housing, expanding employment opportunities, and creating pathways into more highly valued work — then the mobility timeline will compress.
Encouragingly, we are already seeing examples of this thinking in action. Iwi housing initiatives, employment partnerships, and place-based development strategies are increasingly focusing directly on the conditions that shape opportunity. In many places, those efforts are ambitious and deeply committed. But even with ambitious efforts, it is important to remain clear-eyed about the scale of the task and the complex issues we’re facing.
Many of the inspiring examples of Māori economic creativity, the iwi building housing developments, trusts running capability programmes, and partnerships creating employment pathways for whānau, are operating at tiny scale. It might be 10 homes here, 30 people gaining skills there. These efforts matter deeply to the whānau involved, but the scale of repair doesn’t begin to match the magnitude of destruction we’ve seen over the last century and a half.
Our challenge isn’t genuine commitment and inspiring effort — it’s proportion. Shifting national patterns of economic mobility requires a scale far beyond the cash flow from the dividend streams of our collective entities. Scale is the difference between building 10 homes and building 1,000. Between helping 30 people into employment and reshaping industries in ways that create thousands of jobs in the places our whānau want to live. That is a different order of challenge.
For the Māori economy to make a measurable difference to intergenerational economic mobility, we need to invent new models of economic activity.
That might mean new approaches to housing finance. It might mean industry transformation strategies that deliberately anchor employment in regions where Māori communities live. It might mean forms of collective enterprise that blur the lines between commercial return and social investment.
Whatever the specific mechanisms, the point is that the challenge is not simply how to accelerate intergenerational mobility but how to redesign parts of the system that produce it.
For those judging the Māori economy’s ability to achieve this within 40 years of the first Treaty settlements, it might be worth taking a breath. Rebuilding an economic base after generations of dispossession was never going to be a quick project. For those of us inside the work, who are sometimes impatient with the pace of change, the responsibility sits with us. If scale is the problem, then creativity is the task.
Māori have already shown that we can redesign systems when the stakes are high enough. Thirty or 40 years ago, many people believed te reo Māori was on an irreversible path toward extinction. The systems that obliterated our language seemed immovable. Yet through kōhanga reo, kura kaupapa, broadcasting, and countless acts of collective determination, Māori communities redesigned those systems.
Economic transformation will not look the same. But it will require the same ingredients: imagination, persistence, and the willingness to build institutions that did not previously exist. If we could do it for language, there is no reason we can’t do it for economic wellbeing too.
Sacha McMeeking (Ngāi Tahu, Ngāti Mutunga) is an academic and practitioner working at the intersection of policy, design, and social change. Her writing explores how Indigenous knowledge can lift collective wellbeing.
The post When will the Māori economy solve Māori disadvantage? appeared first on E-Tangata.
From E-Tangata via This RSS Feed.