March 28, 2012 7:00am by David Farrar

Treaty relativity clauses

After years of speculation, the Government and Ngai Tahu have confirmed a Treaty of Waitangi top-up clause is set to trigger, potentially pumping millions into the beleaguered South Island economy.

Both Ngai Tahu and Waikato-Tainui negotiated “insurance clauses” as part of their original settlements, entitling each iwi to a percentage of all future Treaty settlements once they exceeded $1 billion in 1994 dollar terms.

For the first time, the Government has acknowledged that amount could be reached this year, which would entitle Ngai Tahu to 16.1% and Waikato-Tainui 17% of all future Treaty settlements.

Morgan Godfrey blogs:

If one or more of the larger iwi settle this year, think Tuhoe and Ngati Tuwharetoa, the relativity clause will almost certainly be triggered. The relativity clause ensures Ngai Tahu and Tainui maintain their position relative to other iwi. It’s, as termed above, an insurance clause.

Under the principles of the Treaty, the Crown is obligated to preserve tribal relations. In practice this means the Crown should not give an unfair advantage to one or more iwi, hence the relativity clause. The clause ensures Ngai Tahu and Tainui remain at the top of the pecking order – at least until Tuhoe and Nga Puhi settle.

I’m surprised this story’s failed to gain more traction. When the clause is invoked, the consequences will be considerable. Many New Zealanders will resent the fact that some iwi can double dip, some tribes may resent this as well and the National government won’t want to this to stick to them. After all, it was the previous National government that negotiated the clause.

I don’t think you can fairly call this double dipping, which I see more as coming back twice for the same claim. Any additional payment due to the relativity clauses is part of the settlement agreement.

The ODT continues:

University of Otago politics department associate professor Janine Hayward said the mechanism was “simply an insurance clause” for Ngai Tahu and Waikato-Tainui, which were among the first to negotiate settlements.

“It was a good deal for both to make sure the settlement happened, and Ngai Tahu were pretty brave getting off the blocks first,” she said.

The iwi were the only ones to have negotiated top-up clauses, which came about after the then National government signalled a $1 billion fiscal cap on total settlements.

I doubt one could have got the initial settlements without those clauses, as this was uncharted territory. It looks like the total cost of settlements will be over $1b in 1994 terms, but even if it reaches $2b, that is not a huge amount of expenditure over a 25 year period – around $80m a year.

This Government is making rapid progress on settling the remaining historical grievances. I don’t think they will all be settled by 2014, but think they probably will be by 2017. It will be a great day when we can put them into the past. That doesn’t mean there may not be ongoing contemporary issues, but the hope is that the focus is more on the future than the past.