By Tina Wilson
Mäori have been involved in financial management practices all of their existence. The only difference being the type of currency used. Historically our people traded and bartered to ensure that our people survived. In order to live this way, there were practices applied and lore adhered to, to ensure the resources were managed appropriately and efficiently.
The phrase “Survival of the fittest” is definitely apt when reflecting on those times of trade and enterprise. Especially when expanding on the interpretation of the term “the fittest”. Fit from a holistic view point could easily be interpreted as Healthy, Wealthy and of course Wise. The fact that Mäori survived is proof in itself that they were good at what they did, good at financial management.
Jump forward two hundred years, is this so different today? Our people are still thriving in the realms of trade and enterprise with many new opportunities on our doorsteps. We are still governed by lore but now also by law. The phrase “Survival of the fittest” is indeed still apt for today’s financial climate. Any individual and business, Mäori or other, would definitely be pleased to tick the box that said they are Healthy, the same applies to Wise and there is definitely a desire to have a big tick in the box for Wealthy.
So what has changed that challenges Mäori to be less competent in this area? Not discounting the hardships that Mäori went through as part of colonisation nor the dependencies created from societal changes, but we don’t behave as strongly in this area as we once did.
It is difficult to talk about a blanket one size fits all approach of financial management, as there are so many differing circumstances and factors for individuals through to businesses. Although there are many principles that still apply no matter how big or small you may be.
As part of the entrepreneurial make up, Mäori will always try and get more bang for their buck by getting as much out of the dollar as possible. This is not a negative thing, but it is a behaviour that we have adopted and one that can sometimes get us into trouble. Sometimes tending to adhere to shortcuts and bypasses.
Individuals
Making the most out of what you have is definitely a skill. Coming through a recession and with the current tax regime, there is not much left to spare. New Zealanders as a whole are typically not very good at saving. Attaining the kiwi dream is just as important to the majority now as it was in the past. Mäori are no exception to this either. NZ has been thrashed by high mortgage rates with very little comparative rise in the standard of earnings and living. Statistically people are living longer, therefore the need to prepare for those days ahead has never been more pronounced. The Mäori demographic will be significantly larger.
What can you do to help? There are lots of online tools to help you plan better and manage your money better. The best thing to do is to take advantage of the Kiwi Saver Scheme and the Government Kiwi Saver start up offer.
The Government contributes a start up incentive of $1,000 to every new Kiwi Saver account. The other opportunity is the compulsory employer contribution. When you don’t have a lot to spare, 2% of your gross earnings does seem like too much. On a salary of $20,000, 2% equates to $400.
You will receive a $1,000 from the Government and an addition 2% (based on your Gross earnings) from your employer. After your first year, you are definitely on the way to building your nest egg. Invest in yourself; we don’t know how long these incentives will be around for.
Voluntary sector
Mäori value things differently when it comes to the wellbeing of our people. More often than not, there is a lot of giving without the expectancy of return. Mäori are definitely some of the biggest contributors to the voluntary sector. Many people don’t even realise that that is what they are doing. Our marae live by the contributions of our people, not necessarily by monetary contribution, but the contribution of KOHA aroha, time and human resource.
It is part of our makeup to do this. Köhanga Reo is another Mäori operation that was designed around a lot of voluntary input. More of our kaumätua have to work longer (if they are lucky to have employment) and many of our mums go back to work a lot earlier, even with the aid of paid parental leave. So in many cases, it tends to be the same few doing the bulk of the mahi. This can lead to individuals burning out or an expectation of payment. There is no right or wrong response, but be very careful how this is managed.
Financial management does not elude our Marae and Köhanga Reo. There are many financial responsibilities that they are pledged with. It is important to understand that there is a lot of stress around the financial responsibilities with Marae and the like. There is a huge reliance on the skills of key individuals involved to ensure that the operational matters are taken care of, then to also have to account for the income and expenditure appropriately. The role of the Treasurer is onerous and often without the appreciation and understanding of time it takes to do the work. It is often viewed that paying for accountancy firms or bookkeepers to do this mahi is additional money that could be spent elsewhere.
The responsibility of financial management does not just sit with the Treasurers, it also is the responsibility of the representative body to understand what they should be looking for and what they are looking at.
What can be done to help? All members should undergo governance training which will cover a section on financial management and reporting. Also look to support your Treasurers by ensuring that they have appropriate training and tools to carry out their functions. Aim to have everything computerised and use an accounting package. There are some good accounting packages that are cost effective. There are a few really good Mäori Trainers in this field of expertise. Contact Te Puni Kokiri to see what assistance may be available regarding your training needs.
SME’s
Bridging into the next space are the Small to Medium sized enterprises (businesses). Most of our Trust and Incorporations fall into this space. These entities are often founded as kaitiaki of assets consisting of “Taonga tuku iho” either directly or from some form of claim. Many of these may also survive on the expectation of voluntary contributions. Many will have a more structured and managed business operation in place and may pay board members. The spectrum from one end to the other is varying and diverse. Some are very basic in their existence and then there are entities which are still considered small to medium, that have a more sophisticated and professional approach to their operations. These entities tend to have a quite detailed structure, with asset holding companies and commercial operating arms in place.
What can SME’s do to improve their Financial Management? Regardless of the size, the Board should definitely undergo governance training with a key focus on financial management and reporting and investment management.
A fundamental “must have” is the ability to understand the nature of risk. Understand the assets and understand the boundaries applied to the assets, communicate this clearly and openly to the beneficiaries. Another fundamental “must have” is the ability to analyse the financial information provided. In order to develop and progress, do not unnecessarily put those taonga or assets at risk.
Sound investment advice will help to determine those parameters. Progression can walk a very fine line, financial planning and forecasting is a “must do”.
SME’s are very prone to outsourcing the financial functions to Accountants and Law Firms, both of whom are often the secretariat for the organisation. At the end of the day, there is nothing wrong with erring on the side of caution and using this expertise. However, there still needs to be knowledge transfer systems in place with the aim of bringing those functions back in house.
If you are progressive, there will always be a need for your professional support, but as you get better, the support you require will be at a higher level.
Some of these SME’s will pay dividends to their beneficiaries and have grants that they distribute. Thinking about better ways to allocate these funds is also a key part of financial management. Mäori need to be more innovative about their social contribution back to their people. Small amounts of money often appease beneficiaries or grant seekers for the here and now. To be truly about the “survival of the fittest”, we need to be doing things better or doing better things. Picking up the latter could mean that a Kiwi Saver account is set up for all beneficiaries and the annual dividend is deposited into their retirement savings.
Regarding grants, instead of giving all grant seekers a morsel of the fund, there are opportunities to apply grant allocations to specialised industry areas pertaining to the business or assets of the organisation. This could be done for the duration of the course term with the potential to provide employment in this area on completion.
Point of Difference
As governers of Mäori organisations it is your Values and Principles that guide you to make your decisions, however don’t let them hinder your operations by changing the rules to suit. Financial Management does not know what race or religion you are. The same rules and regulations apply to all who enter its realm. There is still a lot more we can do to equal the savvy ways of our Tipuna. Mäori have been involved in financial management practices all of their existence. Times have changed and so has the currency used, “Survival of the fittest” is apt, let’s make sure we are Healthy, Wealthy and Wise.
