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How we identified Māori authorities

Defining Māori authorities and Māori businesses for the purposes of Tatauranga Umanga Māori 2014

The Tatauranga Umanga Māori project eventually aims to be able to identify all Māori businesses so we can provide data about them. Our first step is being able to identify Māori authorities. In this report, ‘a Māori authority’ is not the same thing as ‘a Māori business’, but could be considered to be a subset of Māori businesses.

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 purposes4) , or
  • a commercial business that supports the Māori authority’s business and social activities, and sustains or builds a Māori authority’s asset base.

We also include 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 like our Business Register.

Statistics NZ has attempted to address the need for Māori business statistics over the past 20 years. However, we have not published Māori business statistics, mainly because of difficulty in agreeing on a definition of Māori business. A 2008 project that focused on the Māori authority is the foundation for the Tatauranga Umanga Māori project.

Our current approach builds on work done in 2008, which focused on business types with collectively managed assets and/or are ‘by Māori for Māori’.

Tatauranga Umanga Māori – consultation document has more information on the steps we have taken to define a Māori business.

The Business Register

The Business Register is a database of the individual economic units that make up the New Zealand economy. It includes private businesses, ranging 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 468,000 economically significant enterprises, and the locations (geographic units) where they operate.

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 business survey samples can be chosen.

Identifying Māori authorities on the Business Register

Statistics NZ has a Māori Business Indicator (MBI) in the Business Register database. We maintain the MBI through regular monthly updating, using Inland Revenue records for Māori authority tax codes (MA and MT). While this is a good starting point, we know that not all authorities register under these tax codes and therefore coverage is not complete.

Inclusion and exclusion issues

Statistics NZ has also come across some issues within the group of Māori authorities we have identified. This affects the classification we are developing for this group of Māori authorities. A permanent process of populating the Business Register will depend on having an agreed definition and a data source that can be used to automatically update the population. Degrees of ownership matter for the definition, as do views on whether emerging Māori collectives (such as ‘by Māori, for Māori’, as Māori service providers) should be included 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.

A further automated process sets the MBI for other enterprises in an enterprise group, where a 'parent' enterprise is flagged as Māori-owned – this process only works downwards and for ownership relationships of more than 50 percent. The MBI can also be set manually by Statistics NZ staff 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 10 below for examples of business group and identification as a Māori authority).

Figure 10

Limitations of this 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, Statistics NZ has used lists from existing research reports to help identify businesses. However, gaining lists of Māori authorities and their support businesses directly from stakeholders 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 (right-hand diagram in figure 10) 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, information needs to be manually checked 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. Stakeholder information will prove crucial for successful identification.

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

4. See the appendix for details concerning eligibility of electing to be a Māori authority for tax purposes.

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