Te Whanau-a-Taupara Trust Empowering Bill

I move, That the Te Whanau-a-Taupara Trust Empowering Bill be now read a second time. I am pleased to sponsor this bill on behalf of the Te Whanau-a-Taupara Trust and its beneficiaries. The bill proposes to dissolve the Waerenga-a-hika Trust, and constitute the Te Whanau-a-Taupara Trust, in order to modernise the administration of the trust and remove existing impediments to its effective operation.

The Waerenga-a-hika Trust Act 1947 provided for the incorporation of the new board to hold property then held by the Waerenga-a-hika Trust Board. The Act has not been amended since 1947. The present trustees consider that it is now timely that new arrangements be made to provide for the future needs and objectives of the trust.

The bill was introduced on 21 December 2001, and was referred to the Māori Affairs Committee for consideration. The committee received and considered only two submissions on the bill. The submissions identified the challenges for the trust, the key one being the need to modernise its administration. After thorough examination of the bill, the select committee has unanimously proposed a number of amendments that clarify certain matters contained in the bill, and modify to some extent the provisions in the trust deed. I wish to acknowledge and thank the members of the Māori Affairs Committee for their thorough examination of the bill.

In conclusion, I urge that this bill proceed without delay.

Very briefly, the National Party is happy to support this sensible bill. It reorganises a historical structure, and we want to see it modernised. That is entirely what this bill will do, and the National Party will support its progress in both the second and third readings.

New Zealand First supports the Te Whanau-a-Taupara Trust Empowering Bill. The bill seeks to dissolve the Waerenga-a-hika Trust, and constitute the Te Whanau-a-Taupara Trust, in order to modernise administration and remove existing impediments to its effective operation. All assets of the board are to be vested in the trust.

Submissions received from the board and Te Whanau-a-Taupara mentioned the need to modernise the administration of the board; the restrictions imposed by the ties to the Anglican Church; the constraints on self-governance; and the problems caused by perpetual leases. Te Whanau-a-Taupara represents a section of Te Aitanga-a-Mahaki iwi, who hold mana whenua over Waerenga-a-hika lands. These comprise approximately 245 hectares of predominantly pastoral land with an estimated value of $6.048 million that are currently held by the board.

A quick historical review clarifies that the land was given to the Crown in 1857 by the Taupara whānau, which then gave the land to the Bishop of New Zealand. The land was later returned to the whānau in 1862, to become a charitable and educational trust to provide a school for Māori who had connections with the Anglican Church. After the enactment of the Waerenga-a-hika Trust Act in 1947, the object of the trust was designed and defined as being for the provision of scholarships for the post-primary education of children of the Māhaki tribe, especially those of Te Whanau-a-Taupara.

Submitters consider the requirement of the 1947 Act that the trust board be accountable to the Anglican Church is too restrictive, but also recognise their cordial and harmonious relationship for many years. Concern about appointments to the board has been a factor, and, furthermore, the requirement that the education grants be for attendance at Anglican schools only is difficult and becoming more expensive to fulfil. Furthermore, there is creeping in a reluctance of non-Anglican whānau to send their children to Anglican schools. It has been noted that the Anglican Church is in agreement with the Waerenga-a-hika Trust Board about the non-necessity for it to maintain close ties with the church.

The fact that the beneficiaries under the trust deed are related by blood does not prevent the purposes of the trust, as declared by the trust deed, from complying with the public benefit requirement of the law relating to charitable trusts. Unlike the Ngati Rarua-Atiawa Iwi Trust Empowering Act, the bill does not require the trust to keep an official list identifying the beneficiaries. The board does have records of families who meet the criteria, and plans to keep that list under review so that accuracy at all times is maintained.

Clause 10E allows for the trust’s annual accounts and auditor’s report to be made available for inspection by any beneficiary at the trust office at any suitable time. The deed allows and widens the powers of the trustees to adapt and make changes in land use, and also gives provision for board members to exercise business-orientated powers, allowing them to invest trust moneys and assets in enterprises that will return a profit to the trust, and giving them greater control of the use of the funds.

New Zealand First supports the bill and encourages the trust to be accountable to the beneficiaries with integrity and honesty.

United Future will support this bill. It is quite interesting to learn a little bit about the background. It appears that the land was originally donated to the Crown for the purpose of training young Māori to enter the ministry of the Anglican Church. A church school was erected under the auspices of the Anglican Church to facilitate that process. It is quite interesting to see that history as part of the Christian involvement with Māori in the mid-19th century. We all know, as we have seen in the bill, that the school was subsequently burnt down. It appears that there were a number of impediments to erecting a new school, including not only the cost of materials but also the difficulty in getting planning consent to put up a new school.

It has been quite interesting for me to read the debate in the House in 1947, at the time that the original trust was set up to take care of the money that had become available because the school would not be rebuilt. It went to the Anglican Church largely because the original intention for the land had been to foster the close link that Māori had with the Anglican Church. Part of the reason for not rebuilding the school was that the training of Māori, and, indeed, any New Zealanders, for the Anglican priesthood had moved away from local areas—in particular, from Gisborne—and was concentrated in St John’s College, where it is still largely concentrated today. So the idea of having a local school in Gisborne in order to provide training for the Māori priesthood had ceased to be an important consideration.

We have now progressed to the stage where I am very pleased that we as a society see that Māori are quite capable of looking after their own resources, and we do not need institutions—albeit the Anglican Church—to look after resources on behalf of Māori, and to invest them. We can actually entrust that to the people. Of course, it is totally appropriate that the entrustment of those assets goes back to the whānau who originally donated the land, and whom—in a broader sense—the money and the benefits were meant to be allocated to.

However, there are a few things in the bill that I think are worth commenting on. Not having been on the select committee, but having been a trust lawyer, I have to draw attention to a few things. The first of those—and I will finish by teatime—is the whole argument of our giving the trust special charitable trust status. The way in which the Inland Revenue Department operates is that there is a requirement for sufficiency of public benefit, and that means that, effectively, in order to make the trust a charitable trust, there was a need to ensure that a special provision was put into the Act to say that it was a charitable trust notwithstanding the fact that there was some suggestion that the Inland Revenue Department would have considered that, because of the blood ties of the beneficiaries, there was an insufficiency of public benefit. It is a little undesirable to make exceptions in that regard when other trusts cannot do that, and I would prefer that the situation was dealt with by the Inland Revenue Department reviewing its policy, rather than by the necessity of our putting in a special clause, but, nevertheless, the clause is there, and in the meantime I do not see any objection to it. I do not think that, when blood ties are so extensive as to include an extensive whānau with a huge number of people, the simple fact that there are blood ties means that the trust should be taken out of the category of sufficiency of public benefit. Surely, the number of beneficiaries potentially able to benefit from this trust is large enough for the grouping to meet that test.

The second thing is in terms of the alterations or additions to the trust deed. It is quite appropriate that the whānau themselves, and the trustees by a majority of 75 percent, can make the changes that are necessary, rather than their having to come back to this House with more legislation every time they want to make a change in order to keep the trust deed compliant with modern moves in trust law. It is good that they can make those changes themselves, and I welcome that.

The one that does concern me, however, and that I cannot understand, is the provision that clause 17.1 of the trust deed be taken out, which inhibits the power to terminate the trust. In terms of trust law, it is a normal provision that is put in trust deeds to provide a backstop measure in case the trust ceases to function. It is pretty easy to see a situation where the trust might have divested itself of both its capital and income, and be in a position where it really was no longer functioning, for some reason or another, and ought to be wound up. I can see no real reason why, effectively, that clause could not have continued in there simply as a backstop measure, so that there might not be an empty trust, a hollow shell, that had no money or anything in it, and that could not be wound up, simply because that clause had been taken out. I have difficulties with that and I also have difficulties about there not being an ability to appoint a liquidator, for the same reason. There may well be a situation where the trust should not continue, because it has no financial resources. It seems a bit strange to me that those things are taken out.

Those are relatively minor points. Obviously, there are cross-party benefits, so we will support the bill.

Sitting suspended from 6 p.m. to 7.30 p.m.

The ACT party is not represented on the Māori Affairs Committee, and therefore we come to the Te Whanau-a-Taupara Trust Empowering Bill cold. I hope that someone is prepared to take the call to reassure us, after I have put a few questions. At the moment it is very difficult for us to know whether this is simply a minor matter—the sort of private bill matter that goes through so that Parliament can facilitate arrangements that everyone should be happy about, and that are without any public interest implications—or whether, instead, there are things that the public should be concerned about. So as I put these questions, I do rather hope that there is someone listening who can speak to this bill to answer them and reassure me.

The first issue is the purpose clause. I do not have the advantage of having the original trust deed, but the purpose clause of this new trust deed is rather extraordinary for anything that purports to be charitable or benevolent in purpose. I shall refer to clauses 3, 4, and 5 of the trust deed, in schedule 2.

The first one, clause 3, “Creation of Trust”, is quite unexceptional. There is an obvious charitable purpose: “… to promote the educational and vocational training of beneficiaries, residential care of beneficiaries in relation to their educational and vocational training, spiritual welfare (including Tauparatanga) and the relief of poverty …”. There is something in there called Tauparatanga, and it relates to spiritual welfare. I can only assume that, because this deed relates to Te Whanau-a-Taupara, somehow there is a view that the fostering of hapū or iwi consciousness has now become a facet of spiritual welfare. If so, that is a rather peculiar thing for Parliament to be blessing. The notion that a clan consciousness, if we were Scottish, or any kind of simple family consciousness, is now spiritual is indeed peculiar. I would certainly like to know whether that is the correct reading of it.

But then we come to the supplementary “Purposes and Powers” clause. We find that as long as the trustees have decided that satisfactory provision has been made to meet the primary purpose of the trust, which is educational, they may “Establish, maintain and develop marae …”, and they may “Advance the cultural activities, needs or aspirations of any of the beneficiaries:”. That appears to cover any aspiration. Who knows what a cultural aspiration is? Is it to have the biggest CD collection in Gisborne? What is a cultural aspiration? The trustees are also able, we see here, separately to “Advance Tauparatanga amongst the beneficiaries:”—whatever that is—and they may provide donations to any beneficiary. That is not a charitable purpose. It simply means that they can hand out the trust assets to any beneficiary with no restriction as to purpose.

The purposes come, perhaps, within the bounds of charitable purpose where they state the trustees may “Relieve poverty and make loans or grants towards the relief of indigence or distress …”. That is fine, but here is Parliament creating a trust with $7 million or $8 million of assets that no longer even has to list its beneficiaries or keep a roll. There is a concession in this bill against that requirement. So it is not a normal iwi or rūnunga. This trust will now be in the hands of trustees who no longer have the Anglican Church looking over their shoulder. It will now be left to the beneficiaries to incur the cost of challenging anything that the trustees do, because simple, ordinary charitable trust law will apply. Yet these trustees are now free to “Establish, maintain and develop marae …”; to “Advance the cultural activities, needs”—it may not even be cultural needs; from the way that this provision is drafted, it may just be any need or aspiration of any beneficiary, because this drafting is very unclear—and to provide donations.

It could just be a case of if the trust blows this $7 million, it is one family’s loss, and why should Parliament worry? Well, Parliament should worry because this trust is also getting a tax concession that no one else gets.

💬 David Benson-Pope: Tell us about the Pipi Trust.

💬 Hon Parekura Horomia: What about you?

Is that the Labour whip interjecting there? Is it of no concern at all that Parliament is changing a trust that for 100 years has advanced education; is putting the money into the hands of trustees who can hand it out in donations to anyone they like; and is giving them a tax concession, and telling this trust that it can do what any wealthy family anywhere in the country would love to do—put its assets into a trust that the Inland Revenue Department cannot tax, then use that money for anything it likes? Who in this House would try to defend that? Who would defend the Inland Revenue Department being obliged to stand clear of taxing a trust for an unknown but small number of beneficiaries, with $7 million to $8 million in it that can be used for any purpose that the trustees like that has no connection with any traditional charity? That is either a great boondoggle, or this is another instance of the Labour Government considering that, when it comes to pork-barrelling, racism, and handing out largesse, it will even allow its mates the full freedom to prey on trust assets that should be going to beneficiaries, and that should be going to advance education.

I had hoped that someone would be saying: “Oh, that seems to be an oversight; there’s a simple explanation.” I had thought that someone would undertake to take a call and explain this. Instead, I get a series of insults from Ministers on the Labour benches saying the equivalent of the old chant “What about you?”. Why has no one thought that this is serious? Why has the Māori Affairs Committee made an acknowledgment that these are concessions, without acknowledging the full scope of them? This trust does not have a roll of beneficiaries, and now no one will be empowered to look into this. Why is this trust being exposed to the depredations of its trustees with no effective constraint on where that money can go? It would have been a very small thing for the select committee to say that there are a whole lot of useful things in the trust deed, and to have said that it would approve it only if the power to “Advance the … needs or aspirations of any of the beneficiaries:” were struck out.

What sort of trust purpose is that? What lawyer could have put hand on heart or pen to paper and certified that that was an appropriate purpose for a charitable trust? What lawyer, or even parliamentary select committee, could have said that it is charitable to meet the costs of research and establishment, or support of whānau claims? Claims to what? To a swimming pool? Claims to what, for the whānau? Claims to avoid the noise of air traffic overhead? Who knows what that means? There is no restriction of it to any kind of charitable claim. This Government is providing another tax concession, and this time not just the 19 percent concession that ordinary Māori organisations have been given because of the argument that most of the beneficiaries are taxed at 19 percent; this is complete tax avoidance. There is complete exemption because of the charitable status of this trust.

I will be very disappointed indeed, given that there appears to be no prospect of an answer on these questions, if the National Party or New Zealand First decides that this bill should go through. It should be returned to the select committee for answers on these matters.

My questions are genuine questions. If someone had looked as though he or she were going to answer them, we would have voted in favour, because people do vote to facilitate the modernisation of a trust that, clearly, has outdated terms. Parekura Horomia may have an explanation—he is in the House. The Minister of Social Services and Employment, who is in the House, should be looking at the precedent being set here that a trust can give its money to anything instead of education. The Hon Steve Maharey also has responsibility for education, and he might have a view on why $7 million, which should be spent on education, can be tax-free and can be given to anyone. I doubt whether John Tamihere’s Waipareira Trust would have objects as broad as this, and maintain charitable status. I ask Mr Tamihere whether they are broader. Can money be donated to any beneficiary for any purpose?

💬 Dail Jones: What is the charitable trust clause?

The charitable trust clause—

💬 Madam DEPUTY SPEAKER: The question is that the motion be agreed to. All those—

I raise a point of order, Madam Speaker. A number of very serious questions have been raised, and we should give the Government an opportunity for a response.

💬 Madam DEPUTY SPEAKER: Please be seated.

Well, no response!

💬 Madam DEPUTY SPEAKER: That is not a point of order. The question is that the motion be agreed to.