Thursday , February 22 2018

Maori land & property holdings outperform

Recent research indicates Maori authorities continue to steer profitable organisations that outperform the average profit margins of the wider New Zealand economy by a sizeable 18 percent.

“The strong profitability of Maori enterprises is partly due to the significant and growing land and resource holdings of many companies, through which they can reach important export markets and collect land rents,” said Mr Sam Johnson, IBISWorld Senior Industry Analyst.

Maori businesses’ most significant holdings are in the real estate and agriculture industries, which is largely attributable to the land and resource holdings of iwi, at 14.1 percent of non-residential property operators and 11.4 percent of agricultural businesses.

IBISWorld research suggests more than 21,000 Maori enterprises, almost 70 percent of which are sole traders, generate almost $14 billion in revenue annually and contribute five to six percent of national GDP.

Dynamic deals
In addition to substantial holdings in land and resources, Maori enterprises are increasingly diversifying and participating in fast-growing areas of New Zealand’s digital economy.

 “Maori business leaders and self-employed individuals have identified biotechnology, health, high-tech manufacturing and other technology sectors as offering healthy margins and room for growth,” said Mr Johnson.

Favourable funding
In addition to regular business grants, subsidies and other funding, Maori business use funding programs and other benefits aimed at improving the productivity and performance of Maori-owned assets and authorities. IBISWorld estimates that funding, grants and subsidies for Maori authorities vary each year, but typically contribute about 10 percent of total Maori authority income.

“Alongside schemes such as the Pathway to Increased Productivity Programme, which is designed to assist sustainable output increases in primary sector assets, Maori authorities benefit from a company income taxation rate of 17.5 percent compared with 28 percent for non-Maori entities,” said Mr Johnson.

IBISWorld also identified the significant contribution of the Maori Innovation Fund (MIF), known as Te Punaha Hiringa, to support the Crown-Maori Economic Growth Partnership through $3 million each year.

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