Maori Party’s Iwibank hope
An ‘‘Iwibank’’ is needed to expand development of Ma¯ori land, housing and business, Ma¯ori Party coleader 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 startup capital from the taxpayer, but Fox envisions it as drawing capital from Iwi organisations and trusts.
The traditional banking system struggles with communallyowned 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 a Ma¯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 has done next to nothing to get Ma¯ori into warm, dry, affordable homes, Fox says.
An Iwibank may also be the answer to branch closures leaving entire areas of the country bankless, Fox believes, such as happened when Westpac closed Ruatoria’s last bank in 2015, leaving a large tract fo the East Coast without any branches at all.
Exactly what an Iwibank would cost is not known. Fox says the party does not have the same power that National, or Labour, does to get all its policies costed in detail.
But, she says: ‘‘It will start small and grow.’’
The Ma¯ori Party is polling at between 2-4 per cent, but expects to have four MPs.
That means in government it would be a coalition partner, and negotiations would be required to make the Iwibank dream a reality.