Te Whanau-a-Taupara Trust Empowering Bill

I move, That the Te Whanau-a-Taupara Trust Empowering Bill be now read a third time. The passage of this bill through to enactment will finally allow the Te Whanau-a-Taupara Trust to operate within the realities of the 21st century in a manner that takes account of the needs of Te Whanau-a-Taupara.

I will briefly canvass the issues that have given rise to the need for this bill. The Te Whanau-a-Taupara Trust represents a section of Te Aitanga-a-Mahaki who hold mana whenua over the Waerenga-a-hika lands. Those lands comprise approximately 245 hectares of predominantly pastoral land. The land is currently held by the Waerenga-a-hika Trust. In 1857 the land was gifted to the Crown for the purpose of establishing an education trust. The Crown gifted the land to the Bishop of New Zealand, who in 1862, by deed of conveyance, passed the Waerenga-a-hika lands upon trust to the Bishop of Waiapu and certain others, for a school for Māori in connection with the Anglican Church. I commend this bill to the House.

I had just resumed my seat, and there is not an awful lot to add to what I said in the previous phase of this bill, which is being raced through. At this stage, essentially, I shall ask the members of this House, who may not have had an opportunity to consider the questions that were raised earlier, just what they are doing in treating so lightly a bill of this kind.

This bill is a private bill, and was reported from the Māori Affairs Committee. It relates to land that was donated by Māori to the Crown for the purpose of getting for themselves and their neighbours, presumably, the benefits of education. The Crown, for convenience, because compulsory secular education did not come into New Zealand, I think, for about another 15 years, then gave the land back to the church, which at that time was providing most education. The church, at least in respect of this land—unlike so much of the land given for education purposes—vested it again in a trust, which meant that it was kept for the education of the beneficiaries. So this land has an honourable history.

It is fair to look at the source of the trust, and to recognise that it should be of benefit to Te Whanau-a-Taupara. But that does not mean that we should then ignore the public interest in integrity in our tax law and our trust law, and in seeing that the beneficiaries of a trust that has been going for 130 years do not find that that trust evaporates over the next few years. Unless I am very sorely mistaken—and I would be very surprised if I were—this trust does not have any of the protections that the previous trust had. This trust is now, by clause 5, made a charitable trust, which could be a veritable beehive for the wasps—a target for those who would love to access the tax capacity that this trust has.

In my former years as a practising commercial lawyer, if my associates and I could have found an entity like this that could parcel out private benefits, that could send out benefits almost without any reflection of restricted purposes, that could give donations on grounds that are so wide that there is no effective restraint, and that, at the same time, could hold assets without paying tax on them, we would have thought Christmas had arrived. It would be very surprising if, for example, this trust did not end up in a position where people in the Gisborne region vest assets in it on the understanding with the trustees that they will be among the discretionary beneficiaries, so that they can take advantage of the fact that, instead of paying tax of 39c in the dollar on the income, they will pay nothing on the income. [Interruption] There is no shame in the Māori Affairs Committee. There is a very good reason why concessions like that should be governed by the same law across the entire country.

This concession is not justified on the grounds of culture, which is usually the euphemism for some form of racism. In this case, the racist clause—clause 5, which says that, no matter what the trust does, it is deemed to be charitable—is called “Blood ties”. There is nothing that could get closer to the early notion of race being some sort of blood connection. Race is a discredited concept in most research and in most respectable scholarship. In this bill the select committee has managed to reinstate it in its most raw form. In clause 5, this charitable trust, with the justification being only what are called blood ties, does not have to comply with “the public benefit requirement of the law relating to charitable trusts.” It does not have to comply with the law that every other New Zealander is subject to. If one has the right blood ties, this Government says one does not pay tax.

That is not to anyone’s advantage. It is not even, ultimately, to the advantage of the people in this trust, because, as I said, it will be a honeypot or a beehive to attract the wasps. Unless something is done about this trust, it will be the cutest tax avoidance device in Poverty Bay. [Interruption] What is happening?

💬 Hon Parekura Horomia: Come up to the marae for the weekend, Stephen, for a bit of culture.

I am getting incoherent interjections from the Minister of Māori Affairs, but no answer, no explanation, and no reason why this provision will not become a precedent. What will the Minister say when the next whānau or hapū comes before him and says: “Why can’t we share the benefits of a tax-free trust?” What will be the answer from the Hon John Tamihere when urban Māori front up and ask why a small bunch of Gisborne Māori should benefit from a tax-free trust that does not have to confine itself to charity? What will happen? If Mr Tamihere looks at the prospect, he will see that; of course, a precedent is established.

Is this what the trustees of the Anglican Church thought would happen when they consented to the extinguishment of the existing trust, and to it being vested in a new trust deed? Did they think that the rights of the trustees would include “to be paid an emolument for their services as may be fair and reasonable having regard to his or her duties and responsibilities”? Did they think that this $7 million or $8 million trust would end up with trustees who would be paid like that? It is not just reimbursement of expenses; it is emolument. Did they think that the trust for education that they had carefully guarded for 130 years would now be able to enter into any business it liked, for the purpose of handing out to any beneficiary any amount that it liked, for any purpose? That is the effect of this bill. Is that what we thought would happen? There is no answer now; there are interjections only when it does not matter, only when they think they can get away with it in the hubbub.

💬 Hon Ken Shirley: They don’t actually understand it.

Maybe they do not understand it. Well, it is fairly clearly explained. The beneficiaries can have grants for developing their marae, advancing their cultural activities, and advancing their needs or aspirations. I wonder what sorts of aspirations they would be. Given the bill that we are looking at later tonight, it might be an aspiration to pay for commercial sex; that could come into this provision. It is not confined. It does not say that that would not be a purpose within clause 4.3 of the deed.

As for the advancement of Tauparatanga, is anyone here able to tell us what Tauparatanga is? Does anyone here have the slightest idea what advancing it will mean? The sponsor of the bill might be able to say. Is there anyone here who can say what kinds of donations might be contemplated by clause 4.3.4 of the trust deed, which says they need only relate to “any of the beneficiaries or in a representative capacity on behalf of the beneficiaries:”? This gets worse the closer I look at it. The donations do not even have to go to the beneficiaries; they can go to self-appointed representatives of the beneficiaries. They are donations, not investments. They are not, as many trust deeds would say, for the betterment or advancement of the beneficiaries; they are outright grants or donations.

Then, in case we missed the first subclause, 4.3.2, which states “Establish, maintain and develop marae as stipulated by the Trustees in the exercise of their sole discretion:”, we have another subclause that states: “Assist in meeting the costs of whanau development, research and establishment or support of whanau claims:”. Then we have the making of grants or loans towards the provisions of marae. Whatever is in the minds of the Māori Affairs Committee members in recommending that this bill proceed? They must know that other whānau would give their eye teeth to have a trust like this—untaxed and able to do anything it likes. It will be a disgrace for this House to pass this bill through without giving any messages in reply.

As a matter of interest, New Zealand First was not at the meeting at 4.30 on Tuesday, but still apologises for having to take this call. I draw members’ attention to clause 5 in the original version of the bill, which stated that “The trusts declared in the trust deed are declared to be charitable trusts for all purposes at law.” That was deleted because the Māori Affairs Committee realised that it was far too wide-ranging.

I was not at the select committee either, but I have taken the trouble to read the report. The select committee then took the advice of the Inland Revenue Department—which is the body that is most concerned to protect New Zealanders from breaches of charitable trusts—Treasury, Te Puni Kōkiri, and the Parliamentary Counsel Office. That is set out on page 4 of the commentary on the bill. As a result of that advice, the new clause 5 was inserted. There is a recommendation to ensure that, for the period specified in the clause, the fact that the beneficiaries under the trust deed are related by blood does not prevent the purposes of the trust declared by the trust deed from complying with the public benefit requirement of the law relating to charitable trusts. Anyone who had taken a few moments to read the bill would have worked that one out.

Also, as a lawyer familiar with trusts and charitable trusts, I looked to see what happens when the trust is liquidated. This bill has special provisions for the liquidation of the charitable trust, and restrictions on liquidation under the Charitable Trusts Act. So that aspect of it is covered, as well. Looking at the creation of the trust and the matters that the trustees have to promote, it seems to me that they come within the broad range of the Statute of Elizabeth of 1601, and I am perfectly happy to support the bill on behalf of New Zealand First.