Maori Party’s Iwibank hope

Sunday News - - BUDGET BUSTER - ROB STOCK

AN ‘‘Iwibank’’ is needed to ex­pand devel­op­ment of Ma¯ori land, hous­ing and business, Ma¯ori Party co-leader Marama Fox says.

The party as­pires to ‘‘set up a Ma¯ori bank to ad­min­is­ter hous­ing, land devel­op­ment and business start-up loans’’, its eco­nomic pol­icy state­ment says.

It’s 177 years since the Treaty of Wai­tangi was signed, and yet New Zealand still hasn’t de­vel­oped a bank­ing sys­tem that can cope with mak­ing loans to de­velop com­mu­nally-owned land.

An Iwibank would re­quire start-up cap­i­tal from the tax­payer, but Fox en­vi­sions it as draw­ing cap­i­tal from Iwi or­gan­i­sa­tions and trusts.

The tra­di­tional bank­ing sys­tem strug­gles with com­mu­nally-owned land be­cause banks re­duce risk by tak­ing se­cu­rity over real as­sets like homes, land and com­mer­cial build­ings for most of their loans.

Then, if a bor­rower fails to re­pay their loan, the bank can still get its cash back by hold­ing a mort­gagee sale of their home.

But the 6 per cent of New Zealand’s land left in Maori own­er­ship is jeal­ously-guarded.

‘‘Not one more acre’’ was the cry of Whina Cooper 40 years ago in the great land rights march from North­land to Welling­ton, so se­cur­ing loans against Iwi-owned land is off the ta­ble.

Fox says the one home-loan lend­ing scheme de­signed to get around that has failed.

The Ka¯inga Whenua scheme un­der the aus­pices of Ki­wibank was sup­posed to be the so­lu­tion, with the bank lend­ing to fund house-build­ing on Ma¯ori land, with the lend­ing se­cured against the houses, not the land.

As a re­sult, the houses had to be able to be re­moved in­tact for re­sale, if the loan was not re­paid.

But the loans were up to just $200,000, which is too low, Fox says, and few loans have been made.

‘‘It’s so loaded with bu­reau­cracy that they haven’t ap­proved any of them. They have ap­proved just 16 loans in nine years,’’ she says.

There used to be an in­come cap for loans, which car­ried the cul­tur­ally in­sen­si­tive as­sump­tion that once aMa¯ori house­hold had risen up the in­come scale, they qual­i­fied to move away from com­mu­nally-owned land and liv­ing ar­range­ments and into the main­stream of pri­vate prop­erty own­er­ship.

The scheme’s fail­ure means it

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