Is it true that having property rights in partnership with a Maori tribal landowner would be as disastrous as Prof Elizabeth Rata (Opinion ODT 11.1.25) and others claim?
Would my experience be of a "rentier class" tribal landlord giving nothing to the nation’s prosperity, simply taking from my investment and hard work? Would I be victim zero of a "re-tribalised third-world state controlled by a rentier elite", bewitched by "ahistorical time perception", as Prof Rata predicts?
My own practical experience, over the last 20 years, of property rights in partnership with a Maori tribal landowner under the Treaty suggests not. On the contrary, I firmly believe a Treaty-based construal of property rights would make New Zealand fairer and more prosperous, because of the way it creates opportunity for those with little or no capital, for more productive use of their capital for those that have it, spreads risk and reinvests ground-rent back into the local community.
I lease a small piece of land just out of Dunedin, from a Maori tribal landowner. Leasehold property is valued such that the capital value of the lease, though sometimes going up depending on market demand, in theory goes down roughly linearly over the term of the lease, to near zero at the end of the term.
So, I am very unlikely to experience a windfall capital gain on the sale of my lease, but equally, I will not experience a significant capital loss. I can expect a fair price based on the remaining term. And without the Treaty partner in the mix, I would have no property rights at all, since I could not have afforded the capital and debt-servicing cost of a freehold property in that location.
By sharing property rights with each other, the Treaty partner and I also share risk. I bear the risk of moderate events such as fire or storm damage to the structures built on the land (I own those outright), while the Treaty partner bears the risk of more serious events that may permanently damage the potential of the land itself, such as coastal erosion due to sea level rise, large earthquakes and catastrophic storms.
The balance of property rights, and benefits and risks, between myself and the Treaty partner is certainly not unfair to me.
Partnering has also released the limited capital I do have, and my time and income, to invest in more productive things than highly leveraged freehold real-estate, thus contributing positively at the margin to the nation’s prosperity as well as my quality of life.
Consequently, the liberties I enjoy in respect of the property right I share with the Treaty partner are in practice greater than I would enjoy under a theoretically more secure freehold possession. That is because taking out a mortgage to secure nominally freehold possession would severely constrain what I could do with the property, due to the need to service debt and maintain liquidity.
The ground rent I pay to the Treaty partner under the terms of the lease is recycled back into the local community and economy. Among other things it no doubt helps maintain the historic local marae that attracts many visitors and events to the area.
Marae around the country are always the first to step up after natural disasters, like cyclone Gabrielle, and severe community trauma, like the Christchurch mosque massacre. My ground rent to the Treaty partner contributes far more to regional and national prosperity and community wellbeing, than would interest on a freehold mortgage paid to an Australian bank.
My 21st-century experience of the benefits of sharing property rights with a Treaty partner are in fact remarkably similar to the 19th-century historical experience of some of those who signed the Treaty. Now as then, the Treaty’s construal of rights in terms of partnership and sharing offers the chance of a property right to those with insufficient resources who otherwise could not afford it.
I could not afford the cost of the mortgage it would take to secure freehold; back in 1840 the British could not afford the human, financial and reputational cost of securing freehold via total conquest and annexation. Now as then, the Treaty’s irenic generosity releases the community’s capital to be invested in more innovative and productive pursuits, than 21st-century sterile real estate investing for capital gain, or fighting 19th-century colonial territorial wars.
Yet if Prof Rata and colleagues are right, and "history is more or less bunk", as they maintain in not so few words, my experience of shared property rights courtesy of the Treaty should be nothing like that of the 19th-century experience. I should be bitter, resentful and aggrieved at having to share, and not being able to take all, if I win; the tribal landowner should be living high on the hog at my expense.
Yet none of those predictions are remotely correct. In defiance of Prof Rata, the Treaty is ticking along very nicely, raffishly ahistorical, after all these years. Not as fairly to the Maori tribal partners as was originally agreed, but recently and still improving; still creating opportunities for people who lack sufficient capital (or soldiers) to afford freehold property rights; still freeing up capital for investment in more productive enterprises than leveraging real-estate speculation (or war); still fostering the marae network that sustains our communities in times of trouble; still the basis of equity, peace and prosperity in this country.
Prof Rata and colleagues’ potted theory of history and of the principles of the Treaty is thereby refuted. It is an intellectual and political plaything, with no basis in reality.
— Alan McCulloch is a Dunedin software engineer.
